Cyprus is not currently producing any primary sources of energy (other than renewables). It is considered a heavily energy-receiving country, as over 90% of its energy comes from imports. It has no electrical or natural gas interconnections with other countries and, therefore, has an isolated energy system.
The country's dominant source of energy in all sectors, including transportation and electricity generation, is imported petroleum products, which contribute over 90% to the country's gross final energy consumption. In relation to electricity generation itself, approximately 91.6% of it is produced from imported petroleum products. The European Commission has ranked Cyprus as one of the most vulnerable countries in the EU in terms of energy dependency and security of energy supply. The import of petroleum products accounts for approximately 30% of all the country's imports, which is a heavy burden on its balance of payments and reveals its vulnerability to potential macroeconomic imbalances.
Since petroleum products dominate the country's gross final energy consumption, other sources of energy contribute only marginally to the country's energy mix. According to the Energy Service of the Ministry of Energy, Commerce Industry and Tourism, in 2013, renewable energy sources ("RES") had, at the time, a share of just over 8% to the country's gross final energy consumption. RES, which are now more significant to the country's energy mix than they used to be five or ten years ago, are used as follows:
- Solar energy: Solar energy is used by domestic and industrial solar thermal systems. It should be noted that Cyprus ranks second in the world in terms of solar water heating collector capacity per capita. Photovoltaic grids are also used, and they are either connected to the country's (currently) sole electricity company, or are stand-alone and used in other ways.
- Wind energy: There are currently six wind farms in operation with 157.5 MW installed capacity and they all generate electricity which they sell in its totality to the country's (currently) sole electricity company. Wind energy is also used through wind turbines for water pumping.
- Biomass: The total capacity of biomass plants is insignificant, generated through manure/organic animal waste and, again, sold to the country's (currently) sole electricity company.
In relation to the electricity market of Cyprus, this is currently dominated by the state-owned Electricity Authority of Cyprus (the "EAC"), which is the sole generator and supplier of electricity. According to the Cyprus Transmission System Operator of Electrical Energy (the "TSO"), around 91.6% of electricity is produced from imported petroleum products, and only around 8.4% from the RES that are mentioned above. Natural gas will be a significant source for production of electricity in the next few years, as will be discussed further in this chapter.
The accession of Cyprus to the EU in 2004 has meant that the monopoly of the EAC in Cyprus should legally come to an end. In 2004, a part of the electricity market was liberalised for certain non-domestic consumers. In 2009, the electricity market was fully opened in relation to all non-domestic consumers, with a view to full liberalisation for all consumers by 2014. Since January 2014, the electricity market has been fully liberalised to allow all consumers (both domestic and non-domestic) to choose their electricity supplier. Despite the above liberalisation, no electricity company has broken into the market yet and the EAC remains the sole generator and supplier of electricity, thereby enjoying a de facto monopoly. It should be noted that there have been discussions regarding the denationalisation of the EAC, but there seems to be a low possibility that this will happen any time soon.
Even if Cyprus does not currently produce any primary sources of energy, this is likely to change soon, as it discovered large natural gas reserves in its exclusive economic zone ("EEZ") in December 2011. This has been the most significant development in the energy history of Cyprus, and its overall energy policy has been changing rapidly over the last few years due to this. The natural gas discoveries have paved the way for the transition of Cyprus from an energy-receiving country to an energy producer, and potentially exporter.
CHANGES IN THE ENERGY SITUATION, THE LEGAL REGIME AND
Oil and gas exploration – Legal background
In order to be able to outline the developments in the oil and gas sector, one needs to understand the legal regime behind this.
As a full member of the EU since 2004, Cyprus has to fully comply with EU law. The Regulation on the Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters is directly applicable to Cyprus as an EU Member State. Cyprus is also a member of the New York Convention; it has an excellent network of double tax treaties and bilateral investment treaties, and a very favourable tax system, with its corporation tax rate being the lowest in the eurozone (12.5%).
The legislative regime of Cyprus in relation to hydrocarbons is based on the country's obligations derived under both EU and international law. Cyprus is a party to the United Nations Convention on the Law of the Sea ("UNCLOS") which, amongst others, outlines the rights and responsibilities of states in their use of the world's oceans, establishing guidelines for businesses and regulating the territorial waters, contiguous zones and EEZ of states. Cyprus ratified UNCLOS in 1988, and it passed a law defining and regulating its EEZ in 2004. Part of the EEZ of Cyprus is an exploration area of 51,000 square kilometres in the south of the island, which is divided into 13 offshore exploration blocks. The jurisdiction of Cyprus within its EEZ relates to: the exploration, utilisation and management of all natural resources; the waters, the seabed and the soil under the seabed; the production of energy; the utilisation of man-made islands, installations and structures; scientific research; and the protection of the environment.
Agreements on the delimitation of the EEZ of Cyprus exist between Cyprus and respectively Egypt, Lebanon and Israel in relation to the south and south-east of the country. The agreement with Egypt has been ratified and is in force; the agreement with Lebanon has yet to be ratified; and the agreement with Israel has been ratified and is in force (although disputed by Lebanon in relation to the involvement of Israel).
Hydrocarbon exploration and exploitation activities in Cyprus are subject to the Hydrocarbons Law (of 2007 to 2015) and Regulations (of 2007, 2009 and 2014), which were enacted to transpose into national law the EU Directive on the Conditions for Granting and Using Authorisations for the Exploration and Production of Hydrocarbons. Relevant sections of the Hydrocarbons Law stipulate that the ownership of hydrocarbons wherever they are found in Cyprus, including the territorial waters, the continental shelf and the EEZ of the Republic of Cyprus, shall be deemed to be and always to have been vested in the Republic. The powers to determine, within the territory of the Republic and the relevant offshore zones, the areas to be made available for prospecting, exploring for and exploiting hydrocarbons, and to grant authorisations for the prospection and/or exploration and/or exploitation of hydrocarbons in a geographical area, after due process set out in the Hydrocarbons Law, rest with the Council of Ministers.
The Hydrocarbons Law and Regulations set out the criteria for the valuation of the licence applications and provide for three types of licence/authorisation. A prospecting licence is valid for a maximum of one year and involves evaluation of potential by identifying geophysical techniques, and evaluation of offshore potential by carrying out geophysical surveys such as 2D/3D seismic surveys. Prospecting licences do not allow drilling. An exploration licence is granted initially for up to three years, and can be renewed twice for a period of two years for each renewal, providing for a maximum of a seven-year licence. Upon each renewal, 25% of the initial licence area is relinquished. The licensee is permitted to carry out gravity and magnetic surveys, as well as 2D/3D seismic surveys and exploratory drilling. In case of a discovery, the holder has the right to be granted an exploitation licence for that discovery. An exploitation licence is granted for an initial period of up to 25 years, with the possibility for one renewal of up to 10 years. Conditions and requirements contained in the authorisation for exploration or exploitation are stated explicitly in a production-sharing contract ("PSC") between the state and the licence holder. An applicant for an exploration licence must carry out an environmental impact assessment, and has several environmental obligations under international and local law upon being granted a licence.
What is notable in relation to the Hydrocarbons Law is its transfer and change-of-control provisions in relation to rights granted under, or deriving from, a licence. In accordance with section 27 of the Hydrocarbons Law, no holder of an authorisation (meaning any type of licence) may transfer an authorisation or assign the rights arising from an authorisation to another entity, except with the consent of the Council of Ministers. The Council of Ministers may grant such consent: (i) if the transfer or assignment does not endanger national security; (ii) if the entity to whom the authorisation is to be transferred, or the rights arising from an authorisation are to be assigned, has sufficient technical knowledge, experience and financial resources to secure the proper exercise of the activities of prospecting, exploring for and exploiting hydrocarbons; and (iii) if such entity undertakes to comply with such other conditions and requirements as the Council of Ministers may deem proper to impose. In accordance with section 28 of the Hydrocarbons Law, no entity may, after the grant of an authorisation thereto, come under the direct or indirect control of a third country, or a national of a third country, without the prior approval of the Council of Ministers.
Oil & gas exploration – Developments
Once Cyprus had defined its EEZ in 2004 and divided the south of the island into 13 offshore exploration blocks, it announced its first licensing round on 5th February 2007. The first licensing round related solely to Block 12, which is located next to the Israeli Leviathan gas field. Houston-based Noble Energy was awarded a three-year exploration licence and a PSC was signed in October 2008. Noble Energy started drilling in September 2011 and announced, in December 2011, that it had discovered a natural gas reservoir ranging from five to eight trillion cubic feet.
The Cyprus government approved the launch of a second licensing round consisting of the remaining 12 offshore blocks (covering an average area of approximately 4,000 square kilometres each). The public announcement was made on 11th February 2012 and expired after a three-month bidding period, on 11th May 2012. Fifteen bids were submitted from five companies and ten consortia, for nine of the 12 blocks. On 30th October 2012 the government announced that it had reached a decision to award Blocks 2, 3, 9 and 11, which are contiguous blocks (lying north and north-east) to Block 12. Blocks 2 and 3 were to be awarded to a consortium consisting of Italy's ENI (80%) and South Korea's KOGAS (20%). Block 9 was to be awarded to a consortium consisting of France's Total (operator), Novatec Overseas Exploration & Production (of Russia) and GPB Global Resources (again of Russia). Block 11 was to be awarded to Total. Despite the above announcement, negotiations in relation to Block 9 (which was thought at the time to be the richest block in natural gas) did not proceed as expected. The government announced on 24th January 2013 that three PSCs had been signed with the ENI and KOGAS consortium in relation to Blocks 2, 3 and 9 (with ENI being the operator). On 6th February 2013 the government further announced that it had signed two PSCs with Total in relation to Blocks 10 and 11. In relation to the signing of PSCs, it should be noted that the Cyprus government had published a model PSC to form the basis of negotiations with successful bidders for its offshore blocks in relation to the second licensing round.
In relation to Block 12, on 11th February 2013, Noble Energy transferred/assigned 30% of its rights in the PSC to Israel's Delek Drilling and Anver Oil and Gas Exploration, which are both subsidiaries of Delek Energy Systems Ltd. In 2016 it further proceeded with transferring/assigning 35% of its rights in the PSC to BG (now owned by Anglo-Dutch Royal Dutch Shell), which resulted (presumably) in certain amendments to the PSC being agreed with the Cyprus government. The rights under the relevant PSC are now held by Noble Energy at 35%, by BG at 35%, and by Delek Drilling and Anver Oil at 15% each. Noble Energy remains the operator.
The drilling of a second appraisal well in Block 12 was completed in October 2013 in order to further evaluate the findings of the 2011 natural gas discovery. The appraisal work confirmed a mean gross natural gas resource of 4.5 trillion cubic feet, in relation to the Aphrodite field. In June 2015, the Ministry of Energy, Commerce, Industry and Tourism announced that Noble Energy, Delek Drilling and Anver Oil, had declared the Aphrodite field to be commercially viable, and the parties to the relevant PSC have now relinquished Block 12 – with, obviously, the exception of the Aphrodite field. The commerciality declaration is a significant milestone to the transition of Cyprus from the hydrocarbons exploration phase to that of exploitation. The consortium has submitted to the Cyprus government a development and production plan in relation to the Aphrodite field and they are currently assessing regional market options for monetising Aphrodite gas.
In relation to Block 9, after conducting two exploratory drills, the ENI and KOGAS consortium failed to identify any exploitable amounts of natural gas. A request to extend its exploration licence was submitted by the consortium to the government in relation to all its blocks, i.e. Blocks 2, 3 and 9. The consortium's exploration licence has now been renewed for two more years, i.e. expiring within 2018.
In relation to Block 11, an agreement was signed in March 2015 in relation to further exploration works in order for Total to further assess the exploitability of Block 11, but with 25% of the block having already been relinquished. In April 2017, Total farmed-out 50% of its rights in Block 11 to ENI, with Total remaining as the operator. On 12th July 2017 it was announced that the Total and ENI consortium had found certain amounts of natural resources at the Onesiphoros West 1 well, but that such amounts were not enough for a standalone commercial development. Despite that, the new findings raise the prospects regarding the geological structures of similar fields and blocks around the Onesiphoros West 1 well.
As far as the remaining blocks are concerned, no licences had been awarded during the second licensing round and the Cyprus government proceeded with the third licensing round for offshore exploration of Blocks 6, 8 and 10, which are carbonate reservoirs similar to the Zohr discovery in Egypt and different to the Aphrodite field in Block 12. Even though Block 10 was previously awarded to Total, the company relinquished the block in 2015 without drilling any wells, hence the Cyprus government proceeded to include this block in the third licensing round.
As far as the third licensing round is concerned, the Cyprus government announced on 27th July 2016 that it had received the following applications: (1) with respect to Block 6, one application from a consortium (50/50) consisting of ENI (as the operator) and Total; (2) with respect to Block 8, two applications, one from a consortium consisting of Capricorn Oil (as the operator), Delek Drilling and Anver Oil Exploration, and one from ENI; and (3) with respect to Block 10, three applications, one from a consortium consisting of ENI (as the operator) and Total, one from a consortium consisting of ExxonMobil (as the operator) and Qatar Petroleum, and one from Statoil. In relation to the signing of PSCs, it should be noted that the Cyprus government had again published a model PSC to form the basis of negotiations with successful bidders for the relevant blocks in the third licensing round.
The results of the third licensing round were announced on 21st December 2016 and respective PSCs were signed in April 2017 with successful bidders. Block 6 was awarded to the ENI and Total consortium; Block 8 was awarded to ENI; and Block 10 was awarded to the ExxonMobil and Qatar Petroleum consortium. It is reported that 12 exploration wells will be drilled in total, with respect to the three third-licensing-round blocks.
In February 2018, the ENI and Total consortium announced a preliminary natural gas discovery in Block 6, the size of which is estimated to be between 4.8 and 8.1 trillion cubic feet. The Block 6 discovery has been significant, as it is adding to the quantities of natural gas in the EEZ of Cyprus, which makes commercial exploitation easier.
Another recent development is Total's interest in acquiring a 50% stake in Block 8 (which is yet to be approved) and the same company's general interest (through speculations mainly) in broadening further its presence in the EEZ of Cyprus through acquiring a share in Block 3, which is licensed to a consortium of ENI and Kogas.
It should be noted that over the years the Cyprus government has signed several agreements in order to facilitate its cooperation with other countries in the field of oil and gas. To name a few recent ones:
- In September 2014, Cyprus signed a memorandum of understanding with Jordan which, amongst others, provides for cooperation between the two countries in exchanging information and expertise with respect to energy matters, and in assessing the possibility of exporting natural gas from Cyprus to Jordan.
- In February 2015, the Cyprus government further signed a memorandum of understanding with Egypt which, amongst others, authorises the Egyptian Natural Gas Holding Company ("EGAS") and CHC (as defined below) to examine technical solutions for natural gas transportation via a direct subsea pipeline from Block 12 to Egypt.
- In August 2016, Cyprus further entered into an exchange of letters with Egypt concerning the export of natural gas from Cyprus to Egypt.
- Finally, in April 2017, the respective energy ministers of Cyprus, Israel, Greece and Italy signed a joint declaration, committing to support the application for obtaining EU funding for the construction of the "EastMed" underwater pipeline for the transportation of natural gas between Cyprus and Israel to Greece, and from Greece to Italy (the "EastMed Declaration").
Natural gas and the energy/electricity market
The energy policy of Cyprus is harmonised with the energy policy of the EU. The Cyprus Energy Regulatory Authority ("CERA") was established pursuant to the Law on Regulating the Electricity Market of 2003, which was enacted for the harmonisation of Cyprus law with the relevant EU directive concerning common law rules for the internal market in electricity. CERA was established, aiming to open the electricity market (which has been, at least legally, fully opened since January 2014), and is the body responsible to ensure that electricity prices determined by (the current monopoly of) the EAC reflect the actual costs of the services offered with a reasonable profit.
In addition to the above, by virtue of the Law Regulating the Natural Gas Market of 2004 (which transposes another EU directive into Cyprus law) concerning common rules for the internal market in natural gas, CERA is responsible for regulating the natural gas market. The TSO was again established pursuant to a decision of the government of the Republic of Cyprus for harmonisation of Cyprus law with another relevant EU directive concerning common rules for the internal electricity market. The main functions and responsibilities of the TSO are to secure the operation of the electricity transmission system, and to manage the electricity market on an objective, non-discriminatory basis in a competitive environment, while at the same time supporting and promoting electricity generation from RES. The TSO ensures access to the transmission system of all producers and suppliers of electricity. Both CERA and the TSO have a significant role to play in the energy market of Cyprus, especially in relation to the electricity market, and their role will be even more significant if electricity companies do break into the Cyprus market in the next few years.
Even before the discovery of natural gas in the EEZ of Cyprus, the Council of Ministers decided to import natural gas for the production of (mainly) electricity. Any power station/unit of considerable capacity should be fuelled with natural gas. Despite the natural gas discoveries, according to commentary, natural gas from the EEZ of Cyprus will not be available to the Cyprus market at least until 2020 (at the earliest) and exports are not expected to commence before 2024. Cyprus therefore needs to import such natural gas if it is to use any natural gas any time soon.
It is planned that the supply of natural gas to the Cyprus market will be a clear monopoly for a number of years. The Natural Gas Public Company (the "NGPC"), which is fully controlled by the state, was established to become the body responsible for the development of the internal gas market and network. The NGPC is responsible, amongst others, for the import, storage, distribution, transmission, supply and trading of natural gas, as well as the management of the distribution and supply system of natural gas in Cyprus. It will, once Cyprus is able to import natural gas, be the sole importer and distributor of natural gas in Cyprus, i.e. making its position a monopoly. It has to proceed with securing the necessary natural gas quantities, at the most favourable commercial terms, in order to cover the needs of Cyprus for electricity power generation (phase A) and supply industries, hotels and households (phases B and C) with natural gas. It has to develop an efficient gas network, which will initially (phase A) consist of three pipelines, which will themselves be connected to the gas import hub, and to the three existing downstream power stations (all owned and controlled by the EAC). The estimated cost for phase A is approximately €65m, and a €10m grant has been secured from the European Economic Programme for Recovery. Phases B and C, which will connect the receiving terminal to industries, hotels and households, are expected to cost over €500m.
As the NGPC needs to start importing natural gas into Cyprus before the natural gas from the EEZ of Cyprus is available, it has over the years commenced procedures for expression of interest for the supply of natural gas in Cyprus, but no agreement has ever been reached. It has, however, in 2018 launched two separate tenders, one for the import of LNG (which can be a temporary matter), and one for the infrastructure for the pumping and transportation of natural gas from the vessels to the EAC reception point. The results of the tenders have yet to be released.
Natural gas – what will be done with it?
The above section, which deals partly with the future of natural gas in Cyprus, does not deal with what will be done with the natural gas discovered in the EEZ of Cyprus. The reserves in the EEZ of Cyprus are estimated to be more than enough to cover the national demand in natural gas for over 20 years; hence natural gas will be exported.
In 2013, Cyprus signed a memorandum of understanding with Noble Energy, Delek Drilling and Anver Oil and Gas Exploration, regarding the construction of a liquefied natural gas ("LNG") facility. The facility would initially process natural gas from the Aphrodite field into LNG for export and delivery to international markets, but it would also have the ability to expand to accommodate additional natural gas discovered in other blocks in the EEZ of Cyprus, as well as natural gas from neighbouring countries, such as Israel and Lebanon. However, following appraisal work in the Aphrodite field, it seems unlikely that such a project would be financially viable, since the estimated reserve quantities are unlikely to be sufficient to enable the construction of an LNG facility. In light of this, the Noble Energy, Delek and Anver consortium may be considering other options such as a floating LNG facility ("FLNG") or a compressed natural gas ("CNG") plant, but the government's preferred option is, and has always been, the construction of an onshore LNG facility, if sufficient reserves in other blocks of the EEZ of Cyprus are discovered to make the construction of an onshore LNG facility financially viable.
It should be noted that the construction of a natural gas pipeline to the east, west or south of Cyprus has also been proposed from time to time. No such plans are currently in place, mainly due to geopolitical factors, but also since it is questionable whether any such pipeline would be financially viable. As far as the west is concerned, despite the EastMed Declaration (as defined above), it is questionable whether such project will indeed be financially viable, and parties are still in the initial stages of its evaluation. Regarding the south, however, meaning a pipeline to Egypt, this may indeed be financially viable and the Minister of Energy, Commerce, Industry & Tourism has recently commented that Cyprus, in its capacity as transit country and future gas producer, will continue to support possible gas export options, such as the EastMed pipeline and a direct line from the EEZ of Cyprus to Egypt. Commentators do suggest that currently, a direct line from the EEZ of Cyprus to Egypt is likely to be the most financially viable option for Cyprus, and the transfer/assignment of 35% of the Noble Energy rights in the PSC for Block 12 to BG (which has substantial interests in Egyptian natural gas) could facilitate a deal between Cyprus and Egypt.
Cyprus Hydrocarbons Company
In accordance with section 16 of the Hydrocarbons Law, the management of the Republic of Cyprus' participation in the activities of prospecting, exploring for and exploiting hydrocarbons may be assumed by the state itself or by a legal person that the Council of Ministers may prescribe. Pursuant to the Hydrocarbons Law, therefore, the Council of Ministers proceeded with the establishment of the Cyprus National Hydrocarbons Company, which later changed its name to the Cyprus Hydrocarbons Company (the "CHC"). The CHC is a private limited company and has a sole member, namely the Minister of Energy, Commerce, Industry and Tourism (on behalf of the state) and a seven-member board appointed in accordance with the provisions of the Hydrocarbons Law.
Pursuant to the memorandum of association of the CHC, the company will have the power to perform the following activities:
- commercial exploitation of hydrocarbons that belong to the Republic of Cyprus;
- commercial participation in infrastructure which is required for the exploitation of hydrocarbons;
- participation in the exploration and/or exploitation, production, processing and transportation of hydrocarbons;
- participation in the management and operational control of the energy infrastructure for the exploitation of hydrocarbons on behalf of the Republic of Cyprus;
- management and/or supervision regarding the execution of any contracts (in relation to hydrocarbons) that have been in the past, or will be in the future, entered into by the Republic of Cyprus; and
- safeguarding of the satisfaction (in priority) of local natural gas needs out of the reserves that have been or will be discovered in the territory and/or continental shelf and/or EEZ of the Republic of Cyprus.
It should be noted that following recent developments in the EEZ of Cyprus, the CHC is currently supporting, for example, the government of Cyprus with the review of the submitted development and production plan in relation to the Aphrodite gas.
OTHER ENERGY-RELATED DEVELOPMENTS
Despite the discovery of hydrocarbons dominating the energy sector in Cyprus, there have also been developments in relation to RES. As mentioned in the introduction to this chapter, RES only have a share of less than 9% of the country's gross final energy consumption. The energy policy of Cyprus is, however, aligned with the energy policy of the EU. The three main goals set by Cyprus are: (1) the development of indigenous energy resources; (2) the enhancement of security of energy supply and competitiveness; and (3) the protection of the environment. In this respect, Cyprus has transposed the Renewable Energy Directive 2009/28/EC into Cyprus law by enacting the Law for the Promotion and Encouragement of the Use of Renewable Energy Sources of 2013. The abovementioned directive aims at ensuring a 20% share of renewable energy in final energy consumption, and to cut greenhouse gas emissions by 20% as compared to 1990 levels, by 2020 in the EU. Cyprus is obliged to achieve a share of 13% of RES in its gross final energy consumption (after adjustment for aviation consumption) and a share of 10% of RES in final energy consumption of transport by 2020.
In 2013, the government announced and implemented certain support schemes for the promotion of electricity generation using RES. One of these schemes involved the provision of state grants to vulnerable households for the installation of 2,000 photovoltaic systems of 3kW each and their connection to the grid of the EAC via net metering. The electricity consumption of the household is offset by the electricity generated by its photovoltaic system into the grid, with the household being billed for the difference. This is estimated to save each participating household 80% on its electricity bill. A second scheme for the installation of a further 3,000 photovoltaic systems of 3kW each (but without a grant) was also announced and implemented in 2013.
In 2014, the Ministry of Energy, Commerce, Industry and Tourism announced similar support schemes for the installation of photovoltaic systems of 3kW each by vulnerable households (with a state grant) and by non-vulnerable households and local government authorities (without a state grant). Another support scheme was announced in 2014 for auto-generating photovoltaic systems of 500kW, each to be installed on commercial and industrial units.
In 2015, the Ministry of Energy, Commerce, Industry and Tourism announced a new scheme for the promotion of the installation of photovoltaic systems, which was amended in 2016, in relation to the following three categories:
- photovoltaic systems of up to 5kW which are connected to the grid of the EAC via net metering with a total available power of 23MW for: (i) vulnerable households, to which a grant of €900 per kW is given (1.2MW); (ii) non-vulnerable households, without the provision of a grant (8.8MW); and (iii) non-domestic consumers, including businesses in the sectors of agriculture, livestock breeding, fisheries and aquaculture, without the provision of a grant (13MW);
- auto-generating photovoltaic systems of up to 10MW each in commercial and industrial units, with a total available power of 40MW; and
- auto-generating photovoltaic systems which are not connected to the grid (where every consumer has a right to submit an application for this category).
Further to the above, the Ministry of Energy, Commerce, Industry and Tourism in 2017 announced a new scheme to install systems which produce electricity from RES for commercial purposes, in order to integrate such systems into the competitive electricity market so that the national target in accordance with the Renewable Energy Directive 2009/28/EC is achieved. This scheme, which was amended in 2018, promotes the installation of photovoltaic systems of up to 8MW each, wind systems of up to 17.5MW each, biomass utilisation systems of up to 5MW each, solar energy storage systems of up to 50MW each, and wave energy utilisation systems of up to 20MW each.
MAJOR ECONOMIC EVENTS AND DEVELOPMENTS
The March 2013, Eurogroup decisions resulted in Cyprus going through its worst economic period since the Turkish invasion of 1974. Severe austerity measures have been imposed, the country's banking sector was forced to shrink, and unemployment rates have risen. The discovery of natural gas in the country's EEZ will play a major role in the island's economic recovery.
This article appeared in the Seventh Edition of Global Legal Insights – Energy; published by Global Legal Group Ltd, London.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.