The European country with the most zone hours generates little renewable energy. Corona funds should help to change that. But a submarine electricity connection must above all provide solace.
A crisis like the corona pandemic calls for firm measures. The EU has freed up EUR 723.8 billion to use the corona recovery and Resilience Facility (RRF) to pull the European economy out of the recession caused by corona. To claim a share of that big bag of money, member states submit a plan to the European Commission. In the series Decarbonizing Europe, we put these plans under a magnifying glass. This week: Cyprus.
If quantity matches quality, Cyprus succeeds with flying colors. The Cypriot recovery plan worth some 1.2 billion euros has no less than 592 pages. add the four annexes and it’s like having a book by George R. R. Martin in your hands. For comparison, Malta is preparing for the spending of 300 recovery millions with 25 pages.
The size of the moustache. According to Theododis Tsiolas, the plans are also well implemented in concrete terms. Tsiolas is head of the Directorate’ growth’, part of the Ministry of Finance. The plan was written on his offices in Nicosia. “For the most part, the budget is geared towards the accelerated transition to a green economy.”Almost five hundred million are invested in it.
That’s not a sinecure. Take the transport. Car ownership in Cyprus is high. A tourist leaflet distributed in Nicosia jokes about how to recognize a Cypriot. “He takes the car to get a Coke at a bar two hundred meters from his home.” It’s going to take a while before all those (remarkably many diesel)cars start pouring out of another barrel. In Cyprus, electric vehicles (EVs) can currently be counted on the fingers of a hand – and we mean that literally. Electric charging on public roads is hardly possible.
Testing ground for mobility
But that will all change in a short time, they promise at the Directorate and so says the plan that was already approved by Ecofin (Council of EU finance ministers) in July 2021. Six months ago, Brussels transferred the first tranche of more than 150 million euros. Cyprus is spending Corona money by providing subsidies to, among others, motorists who switch to an EV. the infrastructure for electric charging is also being set up. In any case, ten fast charging stations will be added to the public road. Cyprus, which is about five times smaller than the Netherlands, actually has the right dimensions to be a testing ground for fully electric mobility.
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In addition to electric mobility, Cyprus will also invest Corona funds in making the more than 430,000 homes, apartment buildings, offices and companies energy efficient. Because government policies to force the construction industry to build “economically” have long been lacking, many existing buildings fall into a low energy efficiency class. This is not only harmful to the environment, but also to your wallet. Energy costs in Cyprus are among the highest in Europe, even though taxes and VAT rates are relatively low.
This is mainly due to the fact that around ninety percent of electricity is generated from oil, in many cases still fuel oil. This fossil fuel is transported by sea. The goal is to end dependence on oil.
Key project is a liquefied gas terminal currently under construction. But construction has been greatly delayed. The project has also suffered financially. Although the European Union has invested one hundred million in the project (pre-Corona money), the government has had to take out more loans. “It is doubtful that this project will deliver the promised benefits by the time it is completed. Cyprus is certainly tied to gas for the next ten years to repay the loans,” says Charles Ellinas. That is not an incentive to invest even more in truly sustainable sources. Ellinas is an expert in the oil and gas sector and a researcher (fellow) at the American think tank Atlantic Council.
The Cypriot RRF also provides for reforms; this, by the way, is a requirement when approving all national plans. The energy sector is expected to open before the end of this year. A provider has a monopoly. But Charles Ellinas has little confidence that this measure will have the desired effect, precisely because of the (financial) obligation to purchase liquefied gas. “Despite the abundant solar energy we have in Cyprus, this source is not used as well as in other countries.”Ellinas points out that Cyprus ranks second from the bottom of the EU list in terms of the use of sustainable sources in the energy mix (source: Eurostat, 2020 Figures, Ed.).
But Charalambos Rousos, director of the Energy Directorate of the Ministry of energy, trade and Industry, says Cyprus is fully committed to solar energy. “We have been building solar parks for a few years and we expect to have a capacity of 700 megawatts by mid-2023. That accounts for sixty percent of electricity demand.”Solar panels on roofs, by the way, have long been commonplace on the island, but only provide heating of water. Despite the abundance of sun, Cyprus will never be filled with solar panels, says Rousos. For that, there are too many fluctuations in supply and demand and there is the problem of energy storage. Rousos says Cyprus is stopping new investments in onshore wind energy because it is too inefficient. It simply blows too little.
Cyprus does not have it easy: in terms of energy, the island is dependent on itself. It is the only European country not connected to the European grid. The nearest EU country is Greece, which is almost a thousand kilometers away. The so-called EuroAsia Interconnector must put an end to the insulation. The world’s longest submarine electricity cable will link the Greek and Cypriot electricity grids. This will enable Cyprus to import (also green) electricity in the future and to supply solar energy to the grid. At a later stage, Israel will also be connected to that network.
All in all, it will not be easy for Cyprus to meet European targets, such as the drastic reduction of carbon emissions and accelerated production of renewable energy. In any case, it will be difficult to comply with ‘Fit for 55’, the European Union’s tightened plan to reduce greenhouse gas emissions by 55 percent by 2030. Although those plans are not yet final, Rousos of the Energy Directorate sees it bleak. “In previous European directives, we were granted exemptions due to the special nature of our energy market. The new plans repeal those exemptions. If those plans become definitive, we will have to make investments that we cannot raise. We do not have the economic strength for that.”
