Building Sustainable Cyprus: Central Energy Storage for Hybrid Renewables

Cyprus has set out a policy framework for the integration of energy storage systems after reaching a funding agreement with the European Commission (EC).

The Mediterranean island’s Ministry of Energy, Commerce and Industry (MECI) last week announced its ‘General policy framework for energy storage systems’. It said the government will be deploying centralised energy storage systems and at the same time launched a public consultation into how best to direct funding to support renewable energy sources that can be combined, or hybridised, with energy storage system (ESS) technology.

The network of central energy storage systems will be installed by the State, MECI said, and they will be owned by the national energy supplier Cyprus Energy Authority, through its business unit for networks. The systems will be administered by the Cyprus Transmission System Operator (TSOC), which as the name implies, is the national transmission system manager.

Central Energy Storage

The MECI announced the allocation of at least €40 million (US$45 million) for the development of central storage systems. These systems will be constructed, owned, and administered by the state.

While it didn’t mention in a public announcement how technology providers, contractors and other partners will be chosen, MECI did say that any battery energy storage system (BESS) projects must be completed within 18 to 24 months after receiving required approvals. Whereas for non-battery systems, a longer timeline for implementation will be allowed.

In addition, the government has set aside a budget of €10 million to €40 million to fund renewable energy projects, with the potential inclusion of energy storage. This demonstrates the government’s commitment to supporting the integration of energy storage technologies alongside renewable energy installations.

Renewable Energy for Cyprus

Cyprus is embarking on an ambitious journey to increase renewable energy usage across all sectors, as outlined in its National Energy and Climate Plan. The country aims to achieve a renewable energy share of at least 22.9 per cent in final energy consumption, covering electricity, heat and cooling, and transport, by 2030. This includes targets of 30.3 per cent for the electricity sector, 14 per cent for transport, and an even higher goal of 39.4 per cent for heating and cooling. However, in 2019, the renewable energy share in the electricity sector was a mere 9.8 per cent.

To support Cyprus in its green transition, the EU and Cyprus signed a Partnership Agreement on July 8. Under this agreement, the EU has committed to investing a total of €1 billion in Cyprus and its Just Transition Fund (JTF) between 2021 and 2027. The agreement also establishes the terms for directing these funds effectively.

The JTF has a dedicated budget of €101 million, with a focus on various initiatives. This includes strengthening transmission and distribution networks (T&D) to accommodate energy storage and renewable energy integration. It also involves providing support to small and medium-sized businesses for adopting new technologies, particularly in the renewable energy sector. Furthermore, the JTF aims to enhance the skill set of Cyprus’ workforce in green technology industries, ensuring the availability of skilled professionals for the country’s sustainable future.

EU Pushing for Energy Storage

In response to the Russian invasion of Ukraine and as part of the European Green Deal, the EU is intensifying its efforts to raise renewable energy targets. Over the past few months, several European countries have received funding or state aid for energy storage, aligning with the REPowerEU plan.

Hungary has been granted €1.1 billion in state aid, while Slovenia has secured €150 million in grants for renewable energy and storage projects. Estonia is benefiting from funding through the EU-wide Recovery and Resilience Facility. Other countries, including Romania, Croatia, and Finland, have also been recipients of funding. Greece, on the other hand, is utilizing EU funding for an ongoing 400MW tender scheme. Projects in the latest round are eligible for grants of up to €200,000 (US$218,000) per MW of installed power.