The high dependence of Cyprus on oil makes it particularly vulnerable, given that it accounts for 85,6 % of the country's energy mix[/B]. This element exposes the economy to oil price fluctuations on international markets and creates a dependence on imports.
The truth of the matter can be seen in the European Commission's report-recommendation prepared for the year 2022, which states that 'Cyprushas one of the highest electricity prices in the EU due to this dependence on imported energy sources, its isolated island location and an uncompetitive electricity market.'
Cyprus
has one of the highest electricity prices in the EU due to this dependence on imported energy sources, its isolated island location and an uncompetitive electricity market. Energy consumption, including transport, has increased by around 60 % over the last three decades, while in the EU over this period it has remained almost stable."
In addition, the European Commission suggests that accelerating interconnections with neighbouring countries would help to achieve strategic autonomy, stimulate the green transition and reduce electricity prices. In particular, the increase in interconnection lines would allow more energy from renewable sources to be absorbed by the grid and end Cyprus' isolation in terms of electricity.
"Similarly, the completion of the construction of LNG import facilities, which was halted due to the COVID-19 pandemic, would support these objectives. The proposed natural gas interconnection pipeline projects should be compatible with hydrogen. At the same time, Cyprus could benefit from intensifying the ongoing efforts to reduce energy consumption by increasing energy efficiency through the measures identified in the National Energy and Climate Plan," the report notes.
At the same time, the European Commission explains that conditions are favourable for accelerating the development of renewable energy sources. "Greenhouse gas emissions, which are largely caused by energy production and transport, are well above the EU-27 average, and Cyprus should make efforts to reduce greenhouse gas emissions in line with its obligations to the EU."
To this end, Cyprus is investing in renewable energy sources - in addition to the domestic electricity grid and storage systems - to achieve a higher share of energy from renewable sources. Therefore, reforms in the Recovery and Resilience Plan, such as liberalising the electricity market, introducing a carbon tax or amending the regulatory framework for energy storage, can help Cyprus to achieve the targets of the National Energy and Climate Plan 2021-2030.
At the same time, it is noted that Cyprus has a huge untapped potential, especially in terms of solar energy production. "Accelerating the development of renewable energy sources through the rapid deployment of photovoltaics and further streamlining of licensing procedures will increase competitiveness and productivity, reduce Cyprus' dependence on fossil fuels, create green jobs and make the island's energy system more environmentally friendly," the EU report explains.
Transport accounts for a significant share of CO2 emissions in Cyprus. This is largely due to the fact that almost all land transport is road and private. Passenger transport is heavily dependent on private cars with internal combustion engines, while the use of public transport is very limited. Transport is the most energy-intensive sector of the economy, accounting for 40 % of final energy demand.
Therefore, Cyprus may currently be starting to implement reforms in order to shift towards sustainable mobility solutions, but great efforts will be required to achieve the targets and further measures will need to be taken through EU programmes and national funding.
41% of funds for the green transition
The progress in the implementation of the Recovery and Resilience Plan was presented yesterday Friday by Finance Minister Constantinos Petrides, assuring that Cyprus will continue its implementation.
During his presentation at the first annual event on the Recovery Plan co-organised by the Republic of Cyprus and the Representation of the European Commission in Cyprus, in the presence of the President of the Republic and the European Commissioner for Health and Safety, Stella Kyriakidou, Mr Petrides expressed "great satisfaction" with the disbursement on Friday of €85 million.
Specifically, the plan provides for €1.2 billion in grants and loans, while Petridis indicated that "very important" is that with this comes leverage from the private sector with an additional €1 billion or so.
It is also worth mentioning that 41% of the funds are earmarked for the green transition of Cyprus.
Regarding the objectives of the Plan, Mr. Petrides said that "how challenging the task is is shown by the fact that 271 milestones and targets are included", with the axes of public health and civil protection (€74.1 million), rapid transition to a Green Economy (€447.6 million), strengthening the Resilience & Competitiveness of the Economy (€422.3 million), towards a Digital Era (€89.4 million), employment, social protection, education and human resources (€172.9 million).
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