“Growth in the Sustainable Energy Business – Barriers and

Opportunities”

Anthi CharalambousDirector of the Cyprus Energy

Agency

Reforming: One way street to positive growth

Member of the Cyprus Employers & Industrialists Federation (OEB)

Towards Green Growth

Sustainable

As green growth means fostering economic development while protecting the environment and thus not wasting natural resources while ensuring the well-being of citizens.

The investments and innovation need to be transformed, in order to support a sustainable development and create new economic opportunities.

Green growth in the EU

The European Commission presented its initiative for Green Growth (2014) to support the structural shift towards green growth by maximizing employment opportunities.

There is considerable potential for creating new jobs in the production of energy from renewable sources and by increasing energy efficiency in buildings.

Example: The construction sector could create 400,000 new jobs by constructing more energy efficient buildings that meet the requirements of the Directive on the energy performance of buildings.

Energy poverty(fuel poverty)

Source: Buildings Performance Institute Europe (2013)

In the EU, more than 50 million citizens do not have normal thermal comfort and this is related to the energy poverty.

Can Cyprus move towards green growth?

Green growth

1.Productivity: Incentives for efficient use of energy and natural resources and reduction of wastes.

2. Innovation: Fostering innovation in Cypriot businesses.

3. New markets - New jobs: stimulating demand for green technologies, goods and services create new employment opportunities.

4. Trust: Strengthening investor confidence through greater predictability and stability.

1. Productivity is related to energy cost

The cost of energy imports for Cyprus exceeds 1.1 billion and this accounts more than the 18% of the country's total imports

Source: Energy Service (2014)

Growing number of vehicles

The number of motor vehicles per 1,000 persons has risen by 40% since 1991

Among the Member States there are huge differences

In nine (9) Member States corresponds at least one car in every two peopleSource: Eurostat (2013)

Percentage of passenger cars, ΕU-27Vehicles per 1.000 persons

Freight in Europe

Source: Eurostat (κωδικός ηλεκτρονικών δεδομένων: tsdtr220)

Κατανομή των τρόπων μεταφοράς στις μεταφορές φορτίων ανά χώρα, 2009% σε σύνολο εσωτερικών τονοχιλιομέτρων εμπορευμάτων

ΕΕ-27Οδικές μεταφορές77 %

ΕΕ-27Σιδηροδρομικές μεταφορές17 %

ΕΕ-27Εσωτερικές πλωτοί οδοί6 %

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Differences in the electricity prices

Average electricity prices are expected to increase with the highest exist in the EU and Japan, much higher than those in

China and U.S.

Mean electricity cost in households, 2035

5

10

15

20

25

China United States European Union Japan

cents/kWh

2011 Non-OECD average

2011 OECD average

Source: European Commission, DG Energy (2013)

GDP per person

Energy Intensity of the EU economy

Source: Eurostat (2012)

Energy intensity of Cyprus economy Final energy consumption 2010-2012

(Gross inland consumption divided by GDP)

In the period 2010 - 2012, final energy consumption and consumption of electricity fell to an annual average of 4.6% and 4.4% respectively

In recent years the domestic energy system steadily declining energy intensity of the economy.

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Source: Energy Service (2014)

2. Technology and Innovation

Technology can be transformed from a significant part of the problem to a decisive element of the solution.

Green growth does not need less or more primitive technology.

Most of the old technologies are not environmentally friendly.

Generally, the way to exploit natural resources is directly linked to the type of technology used.

Renewable technologies are those that ensure renewability of resources and protecting the environment.

Source: European Commission – Innovation Union Scoreboard (2014)

Results of 2014 for 25 different indicators for innovation

2. Technology and Innovation

Source: Cyprus Statistical Service (2012)

Expenditures in research and innovation in Cyprus in €1000

2. Technology and Innovation Cyprus

53% spent for labour costs

33% other expenditures

13% in capital investments

39% natural sciences

22% engineering and technology

4% medical sciences

11% agricultural sciences

17% social sciences

2. Technology and Innovation Cyprus

Expenditures in research and innovation in Cyprus in €1000

Source: Cyprus Statistical Service (2012)

The example of the Cyprus solar thermal manufacturing industry

Cyprus is the first country in the world for m2 installed solar panels per capita.

The industry began in 1960. From then until now have been installed 926.564 m2 solar collectors.

Until 1998 there was a large number of exports.

The Cypriot industry could not become competitive and the vast majority of solar panels are imported.

Source: Cyprus Union of Solar Thermal Manufacturers (ΕΒΗΕΚ) and European Solar Thermal Industry Association (2013)

3. New green jobs

• The move towards green growth will create new jobs, such as specialized technical engineering positions to positions of blue collar workers.

• Policies should focus not only on creating jobs but also on maintaining jobs.

• Some job positions may be lost, and we need to facilitate the reallocation of workers (e.g through specific vocational training).

Green jobs projections– Cyprus

In Cyprus, according to the "Roadmap" developed under the project «Build Up Skills - Pillar I" , project funded by the European Commission, estimated that needed at least 4,500 employees in 13 different green skills by 2020!

Source: http://www.buildupskills.eu/national-project/cyprus

Cyprus roadmap for green skills

Δεξιότητα 2013

2014

2015 2016 2017 2018 2019 2020

Εγκατάσταση και συντήρηση συστημάτων βιομάζας

46 50 54 59 63 67 71 75

Εγκατάσταση και συντήρηση αντλιών θερμότητας

59 65 72 78 85 92 98 105

Εγκατάσταση και συντήρηση φωτοβολταϊκών συστημάτων

15 53 23 103 68 211 127 225

Εγκατάσταση και συντήρηση ηλιοθερμικών συστημάτων (θερμοσίφωνες)

320 327 333 339 345 352 358 364

Εγκατάσταση και συντήρηση ηλιοθερμικών συστημάτων για θέρμανση και κλιματισμό χώρων

15 18 22 27 33 40 45 50

Τοποθέτηση συμβατικής θερμομόνωσης/θερμοσουβά

523 628 733 837 942 1.047 1.151 1.151

Estimated minimum number of people on an annual basis to hold important green skills

Δεξιότητα 2013

2014

2015 2016 2017 2018 2019 2020

Τοποθέτηση συστήματος εξωτερικής θερμομόνωσης

52 70 92 105 135 174 230 288

Τοποθέτηση κουφωμάτων

105 115 126 136 147 157 167 178

Τοποθέτηση συστημάτων ηλιοπροστασίας

52 63 73 84 89 94 99 105

Εγκατάσταση και συντήρηση κεντρικών ή άλλου είδους θερμάνσεων

353 416 481 549 620 693 769 848

Εγκατάσταση και συντήρηση συσκευών κλιματισμού/ψύξης

294 351 409 471 535 602 671 743

Εγκατάσταση και συντήρηση συστημάτων μηχανικού εξαερισμού

59 70 82 94 107 120 134 149

Εγκατάσταση και συντήρηση αυτοματισμών και ηλεκτρονικών συστημάτων

115 133 152 172 192 213 234 257

Cyprus roadmap for green skills

Estimated minimum number of people on an annual basis to hold important green skills

Green skills and occupational needs (ILO)

Θερμομονώσεις Τεχνικό προσωπικό για τοποθέτηση θερμομονωτικών τούβλων, θερμοσουβάδων, παραθύρων και κουφωμάτων, βαφείς

Θέρμανση/Ψύξη Υδραυλικοί, εγκαταστάτες κλιματιστικών, τεχνικοί ηλεκτρολόγοι

Εξοικονόμηση στην κατανάλωση ηλεκτρικής ενέργειας

Οικιακά συστήματα διαχείρισης ενέργειας, φωτισμός

ΑΠΕ (θέρμανση/Ψύξη) Εγκαταστάτες ηλιακών συστημάτων

Εγκαταστάτες λεβητων βιομάζας

Εγκαταστάτες συστημάτων συμπαραγωγής

Εγκαταστάτες αντλιών θερμότητας

ΑΠΕ (ηλεκτρισμός) Εγκαταστάτες φωτοβολταϊκών

Εγκαταστάτες μικρών ανεμογεννητριών

Source: «Skills and Occupational Needs in Green Building» (Report by the International Labour Organization (ILO) on skills and occupational needs in green building)

4. Strengthening investor confidence

Cyprus has chosen to promote renewable energy technologies and energy conservation by adopting annual Support Schemes.

These Support Schemes although they assist the investment have not been able to create a stable investment environment.

Also have not been able to maintain permanent green jobs.

The example of renewable energy enterprises - Cyprus

Total number of employees in companies operating in the renewable energy technologies (2011-2014)

485

660

854

582

Source: Cyprus Energy Agency and SEAPEK (2014)

The problems facing enterprises in Cyprus operating in the filed of renewable technologies

The example of renewable energy enterprises - Cyprus

The example of renewable energy enterprises - Cyprus

The problems facing enterprises in Cyprus operating in the filed of renewable technologies

Evolution of RESe installations

To achieve the national targets for RES share in final energy consumption 13% by 2020, is expected a rapid development of RES projects (small or large in Cyprus). The target for renewable electricity by 2020 is 16%.

According to the National Action Plan for Renewable Energy in Cyprus target for total installed capacity of PV systems is 192 MW.

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Eight (8) Basic steps for RES projects licensing

Total (8) steps for licensing renewable energy projects are:

0. Preliminary – establishment of a company according to the national laws

1.Application Request for preliminary views on Department of Town Planning & Housing for obtaining preliminary views. If the opinions are positive, then

  2. Application to CERA for exemption from CERA permit (<5MW) and at the final stage of the project application for an operation license (always depends on the capacity of the project).

...

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... 3. Application to the Department of Town

Planning & Housing for issuing of the planning permit. The application for issuing of planning permit should be accompanied by the Study of Environmental Impact Assessment (PV projects> 100 kW).

4. The EIA Committee is responsible for examining the EIA and issuing the environmental terms of the project.

 5. Application for building permit at the District Offices or Municipal Services that function as building permit authorities.

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Eight Basic steps for RES projects licensing

... 6. Application to DSO or TSO for network

connection (depending on the size (installed capacity) of the project), acceptance of the terms of payment and contract for electricity production.

7. Application for grant under the Support Schemes for RES and RUE, a grant agreement with the Management Committee of the Fund.

8. Construction of the plant, connection and Application to CERA for an operation license.

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Eight Basic steps for RES projects licensing

Example: The step 3 which is the application to obtain planning permit the Department of Town Planning & Housing is in consultations with 10 different Ministries/Departments:

(a) The Ministry of Energy, Commerce, Industry and Tourism. (b) The Ministry of Agriculture, Natural Resources and Environment and the Departments of Forestry, Agriculture, Agrarian Reform, Geological Survey, Water Development, Fisheries and Marine Research and Meteorological and Environmental Services and Mining. (c) The Ministry of the Interior, the Department of Lands and Surveys, the relevant District offices and the Game Fund. (d) The Ministry of Communications and Works and the Departments of Electronic Communications, Electromechanical Services, Public Works, Road Transport, Civil Aviation and Antiquities. (e) The Ministry of Defense. (f) The Ministry of Health. (g) The Cyprus Energy Regulatory Authority. (h) the relevant Local Authority. (i) The SBA Administrator, in appropriate cases. (j) The Electricity Authority of Cyprus.

ΕΝΤΟΛΗ 2/2006

Example: The step 4 which is the EIA study approval by the relevant Committee for issuing the environmental terms of the project – in this Committee participate the following 9 Ministries/Departments

Committee on Environmental Impact Assessment: 1. Ministry of Agriculture, Natural Resources and Environment 2. Ministry of Energy, Commerce Industry and Tourism 3. Department of Town Planning and Housing 4. Ministry of Communications and Works 5. Ministry of Labour and Social Insurance 6. Federation of Environmental Organisations 7. Cyprus Scientific and Technical Chamber (ETEK)8. Two consultants 9. Local Authorities

Lambros PV Park

Example: For the issuing of the building permit (Step 5) required opinions from: • The Fire Service • Local Authorities • Department of Water • etc ... (all relevant Services in accordance with the District Administration Offices)

ΕΝΤΟΛΗ 2/2006

Total: 58 areas: 27,1 % of the total land area

Comparison of licensing procedure in MED Countries

(PV<1MW)Malta Italy Cyprus France Slovenia Spain

Departments/ Authorities for

licensing1 5 5 6 4 3

Number of required licences

6 10 6 5 5 10

Number of Authorities

/Departments involved in

the licensing procedure

2 13 4

Large PV parks through a tender procedure

Regarding this tendering procedure 24 projects approved with a total capacity of 50 MW in 2012.

Today (2014) have completed testing and connection only four out of the 24 projects.

If the licensing had been progressed in the period 2012 to 2014 would have invested in Cyprus in RES 55 million Euros.

Would have been created 100 new jobs

Source: Energy Service (2014)

Conclusions

The licensing process in Cyprus for installing renewable technologies can be classified as complex and complicated because many different Departments / Services take part in the licensing process.

In some cases the time authorization even for small PV Parks exceeding two years and this is a deterrent for some investors.

The process involves hidden costs for which investors are not aware from the outset.

Time limit on applications for grant / sponsored by the Schemes, there is no electronic application system.

Creation of a "pin map". That is a map which will indicate areas that are suitable for photovoltaic, solar thermal or wind farms. This will allow for faster service to interested investors.

Creation of “one stop shop” that will handle all the procedures for issuing permits for RES projects. This section will be staffed by people of various Ministries and Departments (eg Department of Building and Housing, etc).

Looking ahead!

Economic tools are an important way of intervening to promote green growth and employment.

Taxes, subsidies, CO2 allowances etc. is sometimes more effective tools than traditional legal settings.

But by themselves are not enough, a simplification of procedures is needed and creation of a stable investment environment.

Promoting energy reduction and renewable technologies through diversification of the national energy mix.

Technological challenges and investment in innovation.

THANK YOU

Cyprus Energy Agency (Ενεργειακό Γραφείο Κυπρίων Πολιτών)

Tel. +357 22667716 +357 22667726Fax: +357 22667736

anthi.charalambous@cea.org.cy www.cea.org.cy

"Ενεργειακό Γραφείο"

Member of the Cyprus Employers & Industrialists Federation (OEB)