This article was first published on Italian-Cypriot Chamber of Commerce website.
Cyprus plans to increase the share of renewable energy sources from 13.9% to 22.9% in the period 2021-2030, according to the European Commission’s assessment of the country’s final National Energy and Climate Plan (NECP).
We reiterated Cyprus’ commitment meeting its ‘Green Targets’ within the EU. Cyprus is ready to play its part in adopting policies geared at creating a green economy.
Minister of Energy Natasa Pilides
The Electricity Market and Balancing Market
Cyprus is creating an electricity market and a “balancing market”, in which organisations will be able to generate power for themselves and then sell excess. The balancing market will be a secondary market for power that is not sold. Suppose a village outside Limassol chooses to generate its own power from renewables for its inhabitants. If that village generates more power than it can use, it can earn revenue by selling the power on the electricity market. What the village sells can be used elsewhere on the island where it is needed.
Andrea De Rosa, Italian-Cypriot Chamber of Commerce Delegate for Energy, is an expert in this type of market and explains that: “all products can be stored, accumulated, deposited. All except one: electricity. Electricity cannot stand still and it cannot be stored (if not negligibly). As soon as it is produced, it must be instantly consumed. Therefore, if there is one thing that distinguishes the electricity market and makes it unique, that is dispatching, i.e. the instant-by-instant management of the energy flows that pass through the transmission grid, aimed at ensuring a continuous balance between demand and supply, between the quantity fed into the network and the quantity withdrawn from it.
The European electricity system is divided into the Day-Ahead Market (MGP), the Intraday Markets (MI) and the Balancing Market.
Andrea De Rosa, Delegate for Energy of the Italian-Cypriot Chamber of Commerce
In the MGP, the different operators plan the quantity they plan to produce and consume the next day. After defining the sales and purchase programs in the MGP, the production and consumption units can modify them in the following 7 intra-day markets (MI).
So what happens if the quantity programmed in the MGP differs from what will actually be consumed or produced the next day? How to balance the market if, for example, the next day at 12:00, perhaps for an unexpected heat wave, all offices simultaneously decide to turn on the air conditioning, ending up consuming more electricity than they had been programmed in the MGP? And what if, due to cloud cover and sudden rain, all the photovoltaic systems in a given area are producing less electricity than they had planned in the MGP? Hence the need for continuous balancing.
The reference market in Europe is certainly the German one; in this market, renewable energy producers and traders can adjust their production and consumption schedules every 15 minutes and, practically, up to the moment of physical delivery. Intuitively, the forecast error depends on the timing of the forecast itself: it is easier to plan what I will produce and consume in 15 minutes rather than in 24 hours.”
Cyprus, like all EU member states, is bound to achieve carbon neutrality by 2050. The development of renewables energies and in particular the solar energy is crucial to achieve this goal. EU is promoting funds for this sector and the Cypriot government, other than preparing several strategic plans, is adapting the legal framework so to include the balancing market.
For all of these reasons, investing today in renewable energy market is undoubtedly a great opportunity in Cyprus, because of the great interest that the country has in diversifying its current sources of supply. For the first time, Cyprus is initiating a robust policy to support alternative sources, in line with what has been undertaken by other countries in the past years.
For further information and insights you can write to the Italian-Cypriot Chamber of Commerce to the e-mail address: firstname.lastname@example.org