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OEB opens up its books on energy

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Electricity prices in Cyprus are at an all-time high impacting industry and business. Cyprus Employers and Industries Federation (OEB) has been grappling with the challenges these pose. George Petrou, former president OEB and current chairman of its energy committee, told Cyprus Mail that Cyprus’ energy policy should be reformed. With COP26 in progress, in a timely and in-depth interview, he expanded on the Federation’s proposals and recommendations.

According to Petrou, OEB has identified some major challenges tbeing faced by cypriot industry, that need to be prioritised. These include: cost of energy, greener energy production and energy efficiency. The transition towards a green economy is a necessity, not an option. It is revealing that, according to estimates by the European Commission, in 2017 the economic losses associated with climate change exceeded €270billion worldwide. In the energy sector, the essence of the transition is aptly described by the 3-Ds: decarbonization, digitalization and decentralization. To this end, Cyprus energy policy should be reformed to create simplified institutional and regulatory frameworks that create the conditions for the development of energy storage infrastructure, renewable energy (RES), smart systems and facilitate the transition.

The Federation created a number of committees across the energy spectrum of industries, comprising both suppliers and consumers, and has been regularly feeding the Ministry of Energy as well as the parliamentary committee and regulatory board with recommendations and guidelines. It has submitted a number of proposals relating to: ‘Fit-for-55’ and the tax reform; the recommendation of the establishment of a Council of RES projects rapid licensing, the establishment of a one-stop shop for RES and green projects and everything else that supports the transition to a circular economy.

The recent increase in the price of electricity has been caused by a combination of hikes in the price of fuel and the cost of carbon emissions. Without change this will continue. OEB says that the government now needs to fast-track all activities that could lead to the diversification of Cyprus’ energy mix to increase use of less polluting, less costly and greener fuels. The switch to renewables, energy efficiency and energy storage is the only solution. This will drive Cyprus’ economy towards cleaner electricity production and a more sustainable transportation system.

The import of LNG is considered by the Ministry of Energy as key to the reduction of emissions in power generation. But the project appears to be facing delays, endangering its effectiveness. In OEB’s view it has taken years of discussions on the best options to bring LNG to the island, to where we are now. Although the use of LNG is not a final solution for net-zero emissions, it will act as an intermediary transition fuel. However, with today’s natural gas prices, OEB is deeply concerned of the viability of the whole project. In its opinion the government should now examine plan B solutions to avoid any additional burdens to the economy resulting from delays, or worse, surprising developments. Any proposal, offer or solution which has the possibility to contribute towards achieving the target, ie minimising cost and accelerating transition, should be considered.

So far implementation of renewables has been a slow process. During the past decade, OEB has been working hard to support liberalisation of the electricity market and removal of administrative and legislative barriers, in order to achieve wider deployment of RES.

OEB promotes investments that support energy efficiency and reduction of greenhouse gas emissions and support the creation of local jobs. Additionally, it promotes investments that contribute to the objectives of a circular economy and the rational management of waste in specific priority areas. It has also been working with Cyprus’ banking sector to support financing of projects. Most importantly, OEB puts effort in the re-skilling of the staff of its member-companies including the development of green skills.

In addition, in 2020 OEB established the ‘Cyprus Circular Economy Network (CCEN)’, that operates under its umbrella. CCEN incorporates key founding partners including Cyprus University of Technology, the Cyprus Standardization Organization, Cyprus Institute and Cyprus International Institute of Management (CiiM). Furthermore, many pioneering organizations, both in Europe, as well as internationally, are strong supporters. OEB has also signed a Memorandum of Understanding with the 3 relevant Ministries in Cyprus: Ministry of Energy, Commerce and Industry; Ministry of Agriculture, Rural Development and the Environment; and Ministry of Research, Innovation and Digital Policy. CCEN is also supported by European and International Organisations such as the European Centre of Sustainable production and Consumption, Climate-KIC, Circular Economy & Climate Change Institute and many others of similar importance.

For the last 15 years, OEB has been urging the government to modernize RES planning and prepare relevant road-maps, to remove urban restrictions especially for very small wind turbines 0-500 Watt and to minimise administrative burden. The process should be simplified in order to avoid duplication of work – mainly by CERA for the issuance of the electricity generation license and the Energy Service for the examination of support scheme applications – and create a real and functional one-stop-shop. Each service involved should identify a responsible officer with executive powers who will respond to a specific service hotline.

The final decision on licensing should be taken by a Ministerial Committee comprising Interior, Energy and Agriculture. Documents such as unit connection costs, substation construction, connection terms and PPAs should be published electronically and transparently. OEB is proposing the creation of a website specific to the licensing of RES projects.

The funds Cyprus receives from EU’s Recovery and Resilience Plan (RRR) should contribute to energy transition in Cyprus. OEB was very actively involved in preparing recommendations and actions for inclusion in the RRP through a specifically-created ad-hoc working group. Many of these have been included in the RRR.

In addition to what is being done currently, and in order to take the green agenda forward and bring energy costs down, OEB has suggested that the government should seriously examine the concession of state land and assets, such as public roofs, quarries, dams, etc. for use by renewable energy structures. The immediate establishment of a ‘Rapid Licensing Council’ and through tax incentives or reforms, have also been suggested by OEB, as is the promotion of public-private partnerships through the creation of a public body for this purpose.

OEB strongly recommends that the government focuses on the promotion of energy storage projects as a matter of urgency. Much needs to be done to reform Cyprus’ energy policies, something that OEB has been pursuing vigorously and proactively.

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