1. Power Options for the Eastern Mediterranean Region 19 – 21 November 2012 Limassol, Cyprus
PLENARY SESSION III
Title: “The Challenge of Planning a Comprehensive Energy policy in the EU for a Small country”.
Presentation By: Costas Apostolides, Economist / Planner
Affiliation: Chairman, EMS Economic Management Ltd.

2. AIM
TO STIMULATE DISCUSSION ON CYPRUS AND EU ENERGY POLICIES THROUGH ADOPTION OF A COMPREHENSIVE PLANNING METHODOLOGY.
ALL THE INSTITUTIONS INVOLVED IN ENERGY SHOULD BE INVOLVED IN THE DISCUSSION AND THE COMPREHENSIVE PLANNING PROCESS.
THE PROCESS SHOULD INCLUDE CONTROVERSIAL ISSUES.

3. MAJOR PLAN ISSUES 1 COORDINATING ALL THE INSTITUTIONS
EXPLORATION, EXPLOITATION OF EEZ.
EEZ SUPPLY & DISTRIBUTION SYSTEMS.
INTRODUCTION OF NATURAL GAS IN CYPRUS
ESTABLISHMENT OF ENERGY CENTRE FOR 90 DAY CONSUMPTION STORAGE
SECURITY OF SUPPLIES
CREATE COMPETITIVE CONDITIONS
REDUCE COSTS-ELECTRICITY- ENERGY

4. MAJOR PLAN ISSUES 2 MEETING EU 2020 RES TARGETS
PARTICIPATING IN EU POST-2020 PLANNING
PROMOTING AN EU POLICY OF BALANCE BETWEEN RES AND NATURAL GAS
COPING WITH ECONOMICALLY VIABLE RES
MAINTAINING STABILITY OF THE POWER NETWORK
THE STRENGTHENING AND REORGANIZATION OF INSTITUTIONS TO IMPLEMENT POLICY

5. SMALL ISOLATED STATES SMALL STATES HAVE SPECIAL PROBLEMS
ECONOMIES OF SCALE-INVESTMENT
LUMPINESS OF CAPITAL EQUIPMENT
ISOLATION FROM EU SINGLE ENERGY MARKET
HIGH COSTS
MONPOLIES/OLIGOPOLIES
CYPRUS-SECURITY ISSUES

6. PRESENT SITUATION-EUROSTAT 2009 DATA- 2011 POCKETBOOK
GROSS ENERGY CONSUMPTION HIGHER THAN EU27 AND GROWING, EU27 FALLING.
ENERGY CONSUMPTION REDUCED IN INDUSTRY, INCREASED IN TRANSPORT.
ENERGY DEPENDENCY ON IMPORTS HIGH AT 97%, EU 27-54%
ENERGY INTENSITY (ENERGY OUTPUT/GDP) AT 212 ABOVE EU27-165, BUT FALLING.
THERMAL EFFICENCY POWER PLANTS IS ONLY 37%, EU27-49%
ELECTRICTY CONSUMPTION PER CAPITA IS 10% ABOVE EU27.
GREEN HOUSE EMISSIONS ARE VERY HIGH AT INDEX 178 WITH EU27 AT 83.
IMPLICIT ENERGY TAXES ARE LOW AT 114, EU

7. EU POLICIES ACHIEVE 2020 TARGET FOR EU OF 20% RES CYPRUS TARGET 13%
ACHIEVE 10% BIOFUELS FOR TRANSPORT
ACHIEVE 20% REDUCTION IN ENERGY CONSUMPTION.
INTRODUCE GREEN CONSTRUCTION
CONSIDER POLICY AND TARGETS FOR
POST

8. EU TARGETS FOR MEMBER STATES 2005 - 2020
Country
Share of RES Energy (2005)
Target Share for RES (2020)
RES TARGET GROWTH
Belgium
2,2%
13%
10.8
Bulgaria
9,4%
16%
6.6
Czech Republic
6,1%
6.9
Denmark
17,0%
30%
13.0
Germany
5,8%
18%
12.2
Estonia
18,0%
25%
7.0
Ireland
3,1%
12.9
Greece
6,9%
11.1
Spain
8,6%
20%
11.3
France
10,3%
23%
12.7
Italy
5,2%
17%
11.8
Cyprus
2,9%
10.1
Latvia
32,6%
40%
7.4
Lithuania
15,0%
8.0

9. EU TARGETS FOR MEMBER STATES 2005 - 2020
Country
Share of RES Energy (2005)
Target Share for RES (2020)
RES TARGET GROWTH
Luxembourg
0,9%
11%
10.1
Hungary
4,3%
13%
8.7
Malta
0,0%
10%
10.0
Netherlands
2,4%
14%
11.6
Austria
23,3%
34%
9.3
Poland
7,2%
15%
7.8
Portugal
20,5%
31%
10.5
Romania
17,8%
24%
6.2
Slovenia
16,0%
25%
9.0
Slovak Republic
6,7%
7.3
Finland
28,5%
38%
9.5
Sweden
39,8%
49%
9.2
United Kingdom
1,3%
13.7
AVERAGE:
9.8

10. Cyprus: RES Targets For Electricity 2011 - 2020
RES TECHNOLOGY
2020 MW
WIND
114
165
180
210
300
PHOTOVOLTAIC 10 25 50
100
192
THERMO SOLAR 75
BIOMASS 6 8 15 17
TOTAL
130
223
290
400
584
% TOTAL ELECTRICITY
16%

11. SHARE RES IN THE FINAL CONSUMPTION FOR 2011
RES TECHNOLOGY
TOE %
SOLAR THERMAL
62 991
55.6
BIOFUELS
16 012
14.1
BIOMASS
17 985
15.9
EL. FROM BIOMASS
4 438
3.9
EL. FROM WIND
9 831
8.7
EL. FROM PV SYSTEMS
1 027
0.9
GEOTHERMAL
1 045
TOTAL
100%

12. ENERGY INSTITUTIONS MINISTER OF COMMERCE, INDUSTRY, TOURISM (ENERGY).
ENERGY SERVICE
COORDINATING ENERGY COUNCIL( NOT EST. BUT MENTIONED).
CERA
ENERGY TRANSMISSIONS OPERATOR
ELECTRICITY AUTHORITY CYPRUS

13. ENERGY INSTITUTIONS
CYPRUS ORGANIZATION FOR STORAGE AND MANAGEMENT OF OIL STOCKS (KODAP)
NATURAL GAS PUBLIC COMPANY -DEFA-CYGAS
CYPRUS HYDROCARBONS COMPANY
STATE COMPANY FOR HYDROCABON REVENUES
VARIOUS STATE INSTITUTIONS REQUIRING LISCENSES

14. CYPRUS ENERGY OBJECTIVE
SECURITY OF ENERGY SUPPLY
SECURE EXPLORATION IN EEZ & TRANSPORT OF GAS.
DEVELOPMENT OF RES TO INCREASE DOMESTIC ENERGY RESOURCES
REDUCE DEPENDENCY ON IMPORTS
DIVERSIFICATION OF ENERGY SOURCES
MAINTAIN SUFFICENT STOCKS FOR NATIONAL SECURITY
2.ENSURING COMPETITION & INCREASING COMPETITIVENESS
LIBERALIZATION OF ELECTRICTY MARKET BY ABOLISHING EAC MONOPOLY
REDUCING ENERGY COSTS
LIBERALIZATION OF OIL SECTOR
INTRODUCTION OF NATURAL GAS TO REDUCE COSTS AND EMISSIONS

15. ENERGY OBJECTIVES 3. ENVIRONMENTAL COMMITMENTS
TO EU ENERGY TARGETS FOR 2020
INCREASE RES PROPORTION TO 13%
REDUCE ENERGY DEMAND BY 20%
INTRODUCE NATURAL GAS TO REDUCE GREEN HOUSE GASES

16. CHALLENGES FOR ENERGY PLANNING 1.
OBJECTIVE 1: SECURITY OF ENERGY SUPPLY
IMPROVE AND DEEPEN RELATIONS WITH ISRAEL, EGYPT , LEBANON.
BUILD UP AN ALLAINCE FOF WORLD, EUROPEAN AND REGIONAL POWERS TO COMBAT TURKISH THREATS.
ESTABLISH A STRONG SECURITY MONITORING CAPABILITY IN EEZ.

17. CHALLENGES FOR ENERGY PLANNING 2
COOPERATE WITH OTHER STATES & FIRMS IN ALL EEZ BLOCKS TO ESTABLISH TRANSPORT & PROCESSING SYSTEM FOR NG.
HOLD 90 DAYS SUPPLY OF FOSSIL FUELS IN CYPRUS.

18. CHALLENGES FOR ENERGY PLANNING 3
OBJECTIVE 2: RENEWABLE ENERGY SOURCES
CYPRUS NEEDS A PROACTIVE POLICY IN THE EU TO ACHIEVE BALANCEED POLICY ON RES FOR POST 2020
LEVELS OF RES AT 30%, 40% AND 50% FOR 2020 TO 2050 ARE BEING CONSIDERED.
SUGGEST SETTING LEVEL AT 23% CYPRUS RES AND 30% FOR EU27 IN 2030 (MANDATORY) AND TARGETS BEYOND THAT TO BE INDICATIVE.
GRADUAL APPROACH ON BASIS OF 2020 TO HAVE TIME TO ADJUST TO PROBLEMS.
RES ENERGY UNPREDICTABLE, FOSSIL POWER MUST HAVE CAPABILITY TO PRODUCE 100% DEMAND, THERFORE EAC MUST BE COMPENSATED FOR SPARE CAPACITY.

19. CHALLENGES FOR ENERGY PLANNING 4
OBJECTIVE 3:LIBERALIZING ELECTRICITY MARKET
METERS IN HOUSES AND INVOICING SHOULD NOT BE CONTROLLED BY A COMPETITOR (EAC). SUGGEST CERA.
OWNERSHIP OF TRANSMISSIONS AND DISTRIBUTION SYSTEMS SHOULD BE OWNED BY AN INDEPENDENT AUTHORITY (NOT EAC) POSSIBLE TRANSMISSIONS OPERATOR.
EAC STAFF WITH TRANSMISSION OPERATOR SHOULD BE FULLY INDEPENDENT AND EMPLOYED DIRECTLY BY TRANSMISSIONS OPERATOR.
IF ANOTHER POWER STATION IS NEEDED IT SHOULD BE SET UP A PRIVATE COMPANY.
LISCENSES FOR OPERATION/CONSTRUCTION SHOULD BE ISSUED BY CERA FOR ALL SIZES AND FOR TRANSMISSION T.O.

20. CHALLENGES FOR ENERGY PLANNING 5
OBJECTIVE 4: REDUCTION OF ENERGY COSTS
INTRODUCE NATURAL GAS FOR POWER, HOME AND TRANSPORT.
RES COSTS ARE FALLING AND EXPECTED TO BE COMPETITIVE, THEREFORE GRANTS SHOULD BE PHASED OUT AND ELECTRICTY BILLS REDUCED BY REDUCTION IN RES SUBSIDIES.
LOW MARGINAL COSTS BY WINDMILLS AND PV WILL RESULT IN MAJOR CHANGES IN ELECTRICTY PRICING.
EURASIS CABLE LINKING ISRAEL GREECE AND CYPRUS WILL ENABLE CHEAP SOURCES OF ELECTRICTY TO BE USED.
PHASING OUT OF OLD POWER STATIONS WOULD REDUCE COSTS OF ELECTRICITY.

21. CHALLENGES FOR ENERGY PLANNING 6
OBJECTIVE 5: ENVIRONMENTAL COMMITMENTS
RES TARGETS FOR 2020 ARE ON TRACK.
RES PROCEDURES FOR LISCENSING SHOULD BE SIMPLIFIED AND STREAMLINED.
ENERGY SAVINGS SHOULD BE ACHIEVED BY BETTER INFORMATION ON SAVINGS THAT CAN BE MADE AND CONSUMPTION OF ELECTRICAL GOODS.
GREEN CONSTRUCTION SHOULD BE ENCOURAGED AND vat REDUCED TO 5% FOR NEW GREEN BUILDINGS.
NATURAL GAS IS EXPECTED TO REDUCE GREEN HOUSE EMISSIONS BY 29%.

22. CHALLENGES FOR ENERGY PLANNING 7
OBJECTIVE 5: OTHER CONSIDERATIONS
RESEARCH IS NECESSAR ON WEATHER CONDITIONS (I.E. NUMBER OF CLOUDY DAYS, BY REGION)
THE TRANSMISSIONS OPERATOR REQUIRES ACCURATE INFORMATION ON THE WEATHER, BUT NEEDS TIME TO REACT TO START UP POWER PLANTS, FACILITIES SHOULD BE PROVIDED.
RESEARCH IN RES TECHNOLOGIES AND HOW RES OPERATE SHOULD BE ENCOURAGED.
SUPPORT SERVICES NEED TO BE IDENTIFIED AND BRIEFED ON TECHNICAL REQUIREMENTS THROUGH TRAINING.
THE HUMAN RESOURCES DEVELOPMENT AUTHORITY ESTIMATED THAT NG WILL CREATE JOBS BY 2009.

23. CONCLUSION
THE ABOVE CHALLENGES ARE MEANT TO STIMULATE THOUGHT AND DISCUSSION WITH A VIEW TO THE RESOLUTION OF PROBLEMS THROUGH THE PLANNING PROCESS. ALL THE ISSUES REQUIRE FUTHER RESEARCH, BUT IN GENERAL LEAPS INTO AN UNCERTIAN FUTURE IN SUCH AN IMPORT SECTOR SHOULD BE TEMPERE BY THE RISK AND STEP BY STEP CHANGES BE CONSIDERED TO REDUCE RISK.

24. THANK YOU
COSTAS APOSTOLIDES EMS ECONOMIC MANAGEMENT LTD Tel: