Cyprus may lower its feed-in tariffs for solar photovoltaic and wind farm installations on new contracts with power producers in response to higher than anticipated investor interest, an energy official said.
Cyprus's share of renewable energy sources in its overall energy consumption last year was 5.4 percent compared with the 4.9 percent target for 2011, Ioannis Chryssis of the Ministry of Commerce, Industry and Tourism's Energy Service said.
"We may lower feed-in tariffs but this will apply only to new contracts," Chryssis said today in an interview. "Possible reductions in tariffs will only occur if there is a reduction in purchasing and installation cost."
Should Cyprus lower feed-in tariffs, it would follow similar reductions in subsidized rates for clean energy by European nations including Germany, Spain, Italy and the Czech Republic as the price of solar cells rise.
Power producers on the island-nation are offered a 20-year contract that provides for fixed feed-in tariffs of 0.166 euros (23 U.S. cents) for each kilowatt-hour produced from wind energy, 0.35 euros from household photovoltaic installations, 0.31 euros from large scale photovoltaic installations, 0.26 euros from solar thermal and 0.117 euros to 0.135 euros from biomass, depending on the applied technology.
Investors on the east Mediterranean island that has a comparably limited wind wind potential and a high solar potential "know in advance what their future revenue will be provided they have evaluated wind or solar potential correctly," Chryssis said. A review of feed-in tariffs would only affect PV installations and wind farms.
First Wind Farm
In March, Cyprus's first wind farm with an 82-megawatt capacity went into operation. Cyprus plans to have installed wind farm capacity of 300 megawatts by 2020, according to Chryssis. The capacity of photovoltaic panels installed reached 7 megawatts last month. That may rise to 192 megawatts in nine years to meet the island's green energy targets.
The renewable energy plan also provides for the installation of 75 megawatts of solar thermal and 17 megawatts of biomass plants, all funded by a 0.0044 euros per kilowatt- hour fee.
The Nicosia-based Energy Service, meanwhile, approved the construction of five more wind farms with a total capacity of 75.5 megawatts and the expansion of photovoltaic installations by 10 megawatts in the next 18 months, Chryssis said.
The island's overall conventional power generation capacity, mainly operated by the state-owned Electricity Authority of Cyprus, was 1,438 megawatts in May, according to a website statement of the Transmission System Operator. EAC raised its tariffs 1.9 percent in April 2010 to recover the cost of carbon-dioxide emissions.
