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Cyprus exposed after failure to meet EU energy plan

Energy minister Giorgos Lakkotrypis opening a solar energy plant in May

By Charles Ellinas

The Cyprus government has repeatedly stated that it has a national energy plan that guides the development of its energy sector. However, so far this is shrouded in mystery as it has not gone through any public consultation, despite the fact that the European Commission (EC) expected such draft plans to be submitted by January 1, 2018.

Even Greece is catching up with this. It has been preparing a long-term energy plan to 2030, which will present the policy and basic strategic directions of national energy planning. Italy’s plan is already complete, following an extensive, two-year, public consultation. This includes reduction of energy prices, costs and spending, achievement of environmental goals in line with EU targets, improvement of security of supply and system flexibility and development of Italy’s energy sector, including natural gas. These are objectives Cyprus should also aim to achieve.

Given the importance of energy to Cyprus and its economy, and EU’s demanding energy and climate targets, binding until 2030, with a major impact on Cyprus, this merits further serious discussion.

EC requirements

The EC has requested that each member state produces a draft integrated ‘National Plan for Energy and Climate’ by January 1, 2018, covering the period 2021-2030, with binding commitments on carbon emissions reduction, adoption of renewables and energy efficiency. Following review and inclusion of additional measures that may be requested by the EC, the binding plan should be submitted by January 1, 2019. In order to meet the goals of the EU energy roadmaps for 2030 and 2050, national plans are to be updated every five years, with the first update by January 1, 2024, with integrated national energy and climate progress reports to be submitted every two years.

The requirement to prepare such plans is not new. Guidance on their preparation was issued in November 2015, available on EU websites, including a timetable as follows:

  • 2016: Develop overarching strategy, main objectives and overview of policies of National Energy and Climate Plans and start national stakeholder consultations
  • 2017: Finalise stakeholder, public and regional consultations, provide integrated projections to the Commission and at the end of this process submit draft national plans to the Commission
  • 2018: Finalise and submit National Plans, taking into account Member States’ peer review and Commission recommendations

Sadly it would appear that preparation of Cyprus’ first national plan is yet to start. A recent article suggested that the aim is to prepare a brief, high level, plan by the end of 2019. Not only this is outside the EU timetable, but it is not likely to allow consultation to take place.

As part of Energy Union governance, the EU has set-up ambitious collective targets on renewables and energy efficiency by 2030. Member states are asked to provide early and effective opportunities for public consultation in preparing their draft plans, and attach a summary of public views to their submissions. This should then allow time for the EC to make recommendations and propose adjustments to meet overall EU targets for 2030. It is difficult to see how Cyprus will comply with this if the target date for preparation of its national plan remains the end of 2019.

In fact the EC proposes strengthening the provisions on public consultation and access to data, including the establishment of a permanent energy dialogue to support active engagement of local authorities, civil society, business, other stakeholders and the general public, something which at present is completely lacking in Cyprus.

In December MEPs voted in favour of a proposal that would put pressure on EU member states to raise their ambitions for renewables and energy efficiency targets for 2030. They also voted to oblige states to submit national energy and climate plans to the EC in time for review, with the aim to strengthen the regulatory framework and compliance and avoid ‘freeriding’.

EU energy and climate targets

National plans must demonstrate how they will contribute to achieving the EU targets, which are:

  • 40 per cent reduction in greenhouse gas (GHG) emissions by 2030 in comparison to 1990
  • 27 per cent renewable energy
  • 27 per cent energy efficiency

These targets have been agreed to by all member states, including Cyprus, and will be reviewed in 2020 having in mind to increase the target for energy efficiency to 30 per cent.

National plans should also include national energy policy strategies and funding programmes for research and innovation in the areas of renewable energy, energy efficiency, and other low-carbon technologies including in the transport sector, as well as their market uptake, including strategies to support research and technology institutions.

If achieved, which is very likely at EU level, these targets are expected to reduce primary energy consumption and fossil fuel utilisation in Europe, including gas.

These targets are likely to pose challenges for Cyprus. They are far deeper than the targets in the period to 2020, which were:

  • 20 per cent reduction in greenhouse gas emissions by 2020 in comparison to 1990
  • 20 per cent renewable energy
  • 20 per cent energy efficiency

Cyprus 2020 contribution was very modest and lacked any form of public consultation. It committed to reduce GHG emissions by a modest five per cent by 2020, compared to 2005 levels, and it is on the way to achieve it by 2020. But this is one of the lowest targets in Europe. It is interesting to note that while Europe set its targets in comparison to 1990 levels, Cyprus chose 2005, a year at which such emissions were near their peak and 60 per cent higher in comparison to 1990 levels. By 2015 Cyprus GHG emissions reached a plateau but were still 44 per cent higher in comparison to 1990. In contrast, by 2015 EU emissions were 21 per cent lower than in 1990, already exceeding the 2020 target of achieving a 20 per cent reduction.

In terms of renewables Cyprus’ target is to achieve 13 per cent contribution to its energy mix by 2020. It reached 9.4 per cent by 2015 and should achieve this target by 2020. But, again, this is one of the lowest targets in Europe. EU’s target is to achieve 20 per cent renewables penetration by 2020, with 16.7 per cent achieved by 2015.

It is not yet clear how Cyprus will respond to and achieve the much-increased targets for GHG emissions, renewables and energy efficiency set by the EU for the period 2020-2030, let alone achieve EU’s carbon neutrality goal by 2050. Adopting EU’s 2030 targets would require emissions to be reduced from 44 per cent above to 40 per cent below 1990 levels and adoption of renewables to be trebled. It would also require the rudimentary levels of energy efficiency achieved so far to be increased to 27 per cent. These are daunting tasks!

In his last visit to Cyprus, the EU Energy Commissioner Maros Sefcovic said: “If you’re looking for Cyprus’ natural resources, no need to dive deep; look up! It’s solar energy”. But this has some way to go before it makes a marked contribution to Cyprus energy mix.

A drastic change in Cyprus’ energy mix will be needed after 2020, away from oil-based products into natural gas and a much wider use of renewables for power generation. But implementation of such measures has been left so late that choices may be costly, including import of LNG, with the likelihood that they may lead to higher energy costs rather than lower.

Cyprus Energy Plan

So what is the status of Cyprus National Energy Plan (CNEP) to 2030? Had the EC guidelines been followed, by now stakeholder, regional and public consultation should have taken place and preparation of the draft CNEP should have been completed.

But given that no such consultation has taken place yet it can only be assumed that the process has not yet started, if indeed Cyprus plans to follow EC guidelines.

Given that such the CNEP is expected to detail Cyprus energy plans and include binding climate target commitments, it will have serious implications for Cyprus’ future energy developments, prices and economy. It will bind the next three governments and will have significant economic implications and penalties if they are not achieved. These alone should have been strong reasons to undertake as wide a consultation and buy-in as possible from all stakeholders as many other member states in Europe have done.

In fact, in a report in November 2017 the EU stated that “Cyprus is at an initial preparatory stage regarding the development of an integrated national energy and climate plan for the years 2021 to 2030…No targets are set yet beyond 2020.”

I can only repeat that the inertia that exists and the lack of any serious energy planning and public consultation, leave Cyprus unprepared and exposed.

 

Dr Charles Ellinas is nonresident senior fellow at the Global Energy Centre of the Atlantic Council
@CharlesEllinas

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