The Cyprus renewable energy sector has made large gains in the past decade and looks to continue its upward mobility even despite the global pandemic. Foreign businesses and investors can find this Mediterranean market an advantageous opportunity to start new financial ventures and capitalize on the region’s strategic global corporate hub.
The Aspen Trust Group outlines the prospects of Cyprus’ renewable energy outlook and the many areas of investment potential for the next decade for businesses and individual foreign investors.
Cyprus Energy Industry Outlook
Located in the sunny Mediterranean and with an abundance of renewable energy resources such as solar and wind power, Cyprus has turned its attention towards making advancements in renewable energy development. Already a major global financial hub, Cyprus has made active strides in attracting foreign investments across many industries – finance, corporate headquartering, film production, and shipping. A new wave of investment opportunities has arisen in the energy sector, spearheaded by new government action plans that put Cyprus renewable energy at the forefront of investment development.
The country currently generates roughly 11% of its electricity from renewable energy sources, rising by an average of 1% annually since 2014. While Cyprus is still largely dependent on locally-sourced energy and gas, a challenge the government hopes to overcome by 2030, there is a new interest to put the Cyprus natural landscape to better use at the same time as foreign investment projects pour into the country. This new interest has accounted for a swift increase in renewable energy shares (RES) in 2020 at 13.9%, up from 9.9% the previous year.
To continue this push for Cyprus renewable energy, the government has introduced the Draft Integrated National Energy and Climate Plan (DINECP) to the European Commission and received a positive review for its efforts in becoming a leader in renewable energy solutions among EU countries. Within the 2021-2030 goals, the first step is to increase Cyprus renewable energy production starting with more wind farms, solar thermal plants, and photovoltaic (PV) systems to 13% by the end of this year. The action plan also encourages more development of technologies as well as equal access across the public and private sectors by revamping many of the central planning and grid development policies and infrastructures around the island.
Another component of the action plan lends supporting schemes in the form of subsidies to households and new buildings that utilize renewable energy systems. Already 90% of households use solar energy in water heaters and more than half of the hotels are using larger but similar systems to harness the abundance of annual sunshine of Cyprus. The country is one of the highest users per capita globally for use of this technology. In lieu, the country is hoping to transform this potential with competitive energy-storing capabilities and provide further incentives for harnessing Cyprus renewable energy resources.
Putting an International Green Foot Forward
Proving its commitment to sustainable initiatives, Cyprus renewable energy is being promoted through the partnership with the International Renewable Energy Agency (IRENA), an intergovernmental agency that works with countries to transition to greener energy futures while maintaining economic growth and social development. Alongside DINECP, the Cyprus government has worked with IRENA to release the Renewable Energy Roadmap for the Republic of Cyprus to highlight the obstacles and proposed initiatives to drive the Cyprus renewable energy efforts for the next few years.
IRENA’s Key Research Findings
The Roadmap released by IRENA presents several key findings that project Cyprus as an ideal locale for renewable energy solutions:
- Renewable energy technologies (RETs) such as photovoltaics and wind energy are already primed to produce and meet Cyprus’ energy needs for electricity at a lower cost than the oil-based power system structure.
- By the next decade, 25-40% of the total electricity supply could be produced by Cyprus renewable energy sources with solar photovoltaic systems accounting for 500-1,000MW. At this rate, 15-27% of the supply would be covered by this solar power capability.
- Wind is estimated to be the second most significant contributor to the power grid with a capacity of 175-375MW and contributing 5-9% to the supply.
- Moreover, by IRENA’s estimations, 11,000-22,000 jobs could be created in the Cyprus renewable energy sector by RETs alone.
- Financially, with the shift to natural gas, production costs could lower to EUR 83-92MWh, a considerable reduction from the more current € 130MWh.
Cyprus Renewable Energy Investment Potential
Cyprus is already established as one of the most competitive and beneficial business destinations among EU countries. Often, however, energy resources are overlooked when considering the best business and investment jurisdictions. Yet, energy production and energy-efficient solutions offer both financial benefits for corporations as well as cutting-edge business investment opportunities.
Cyprus has emerged on the world stage as an attractive renewable energy destination with the ability to harness solar energy and wind energy for electricity generation. New interest in sustainable energy production means that many other industries can see large gains from investment development in Cyprus renewable energy.
Promoted RES technologies include:
- Solar energy in the form of solar thermal systems and photovoltaic grid systems
- Wind energy in the form of wind turbines for both water pumping and electricity generation
- Biomass in the form of energy generation derived from organic animal waste treatment
- Small hydro mills up to 30KW rated power
Some fully licensed projects and opportunities for investment are based in Larnaca and Limassol. The 25MW Tower Based Concentration Solar Thermal Power Station in Alassa, Limassol, 10.8MW Onshore Wind Farm in Ayia Anna, Larnaca, and the 108MW Onshore Wind Farm Project in Koshi, Larnaca are a few of the projects underway. RCB Bank financed and completed two solar power plants with a capacity of 7.5MW in Limassol with the help of the European Investment Bank, nearly doubling its energy portfolio contribution.
As Cyprus renewable energy capability is expanded, more investment opportunities are opening up to help deal with the limitations of the energy sector on the island. Several key areas of investment potential include:
- Grid stability and reliability technology and solutions such as interconnections among international electrical networks in Europe and storage capacity for both long- and short-term context
- Pumped water solutions and desalination plants or other water-based energy options
- Promoting private initiatives among other sectors such as in real estate development or tourism
- Shifts away from state-controlled enterprises and more competition among private companies
Cyprus Residential and Office Building Development
As Cyprus energy already comprises water heaters with solar energy in many residential buildings and new governmental action plans encourage the use of solar power through financial incentives for new real estate projects, the latest development projects can benefit from looking toward renewable energy designs. Already, many large-scale development projects are underway through the major cities of the island, bringing with them investment potential for renewable energy enterprises for current and future construction projects. Moreover, businesses in any industry can see financial savings by selecting headquartering offices with energy-efficient systems, thus cutting down on costs or providing governmental rewards for the incorporation of renewable energy.
Support Schemes for Large-Scale Commercial Use
While the government continues to support individual resident homeowners to install photovoltaic systems in the form of solar panels to contribute to the national grid system, the country also aims to push Cyprus renewable energy on a commercial scale. The use of large commercial systems, in the form of wind, solar, or photovoltaic systems, is able to sell the energy produced to the EAC grid or to another supplier.
In May 2012, the Special Fund Management Committee of Renewable Energy Sources and Energy Savings established the scheme alongside the individual homeowner scheme to further Cyprus’s renewable energy goals. The state subsidy came out of the budget for the Special Fund and had an application limit of 26,45MW for photovoltaic systems with a capacity of up to 150kW. Once reached, no more applications for the state subsidiary would be accepted. For commercial systems with a capacity ranging between 151kW and 10MW that were connected to the EAC grid, the state subsidiary application limit was 50MW.
To add to the initiative, Cyprus included thermal roof insulation and other renewable energy sources into plans that targeted energy-saving mechanisms for schools just this year. Known as Energy Efficiency Upgrading of Public Buildings – Schools Energy Efficiency, both thermal insulation and photovoltaic systems are being installed in public school buildings. More than 400 schools have already implemented the installation of more effective Cyprus renewable energy projects to lower energy demand.
Cyprus Startup and Technology Support
Another key factor that makes Cyprus renewable energy a smart investment strategy is the proximity to support systems and a thriving start-up environment. With a Fast Track Business Activation Mechanism, Cyprus has proven to be one of the top startup hubs in Europe. This means that investment ventures in renewable energy solutions can get started relatively easily and find the support they need to see their businesses grow at the international level. Further, advancements in technology and research ensure that Cyprus renewable energy projects can be pioneers among other international markets.
As the impact of renewable energy continues to grow and initiatives such as the net metering scheme take off, one of the biggest challenges is the question of larger, more efficient energy storage systems. For entrepreneurs, this offers a great opportunity to invest in Cyprus and launch a successful business in the energy industry.
If successful, energy technology and business operations can make significant in-roads into the rest of the EU who is also actively encouraging member states to find renewable energy solutions. Cyprus renewable energy has the potential to affect global energy modals and catapult businesses into winning international positions all from an ideal business jurisdiction within the EU.
New Age Tourism Industry
Beyond real estate development projects and technology-based startups, Cyprus has long established its tourism market as a perfect blend of natural scenery and unique cultural heritage. Cyprus renewable energy potential offers investment opportunities for foreign businesses interested in transforming and encouraging ecotourism in the future. With many different aspects and interests within the travel landscape, the island is perfect for finding renewable energy investment prospects across the tourism industry. From hotels to tours and transportation, investors can find a wide range of opportunities for developing profitable eco-friendly businesses.
Established Shipping Industry in Cyprus
In addition to tourism, Cyprus remains a leader in maritime activities. Investment potential in finding renewable energy solutions for shipping activities puts businesses at the center of one of the largest shipping hubs in the world. Cyprus renewable energy investment can be the gateway to breakthrough environmentally friendly transportation systems as well as cost-saving opportunities for businesses that rely on the transportation of goods between markets.
Real Estate Investment Incentives
Foreign investors with an eye on real estate development and investment opportunities, Cyprus renewable energy outlooks could mean great advantages for real estate developers. The net metering scheme allows household producers to earn credits to be used on electricity bills through the installation of photovoltaic systems. As long as the property is legal and has the title deed, owners may contribute to the EAC grid and receive funding for the installation of the photovoltaic system.
Through the 2016 Solar Energy for All scheme by the Ministry of Energy, licenses are granted to homeowners to contribute to the grid system and paved the way for the grant scheme to encourage the use of renewable energy sources and energy-saving for homes in 2019. Under the grant scheme, € 1000 is provided to cover the installation cost of solar panels on a residential property based on 4KWh systems, but funding amount is based on approval of the project and the size of the system being connected to the EAC grid. Since beginning in 2020, more than 1,000 households had already benefited from the scheme. Investors interested in property development projects can increase the value and appeal of their projects by turning towards solutions in Cyprus renewable energy.
Energizing Investments with The Aspen Trust Group
Cyprus renewable energy initiatives are changing the way the country does business and presents many profitable areas of investments. Whether through direct investment in renewable energy projects or indirect investments in cost-saving energy solutions for businesses located in the country, foreign investors can make the most out of the abundance of natural resources found within Cyprus.
As the jurisdiction continues to develop internationally competitive business industries as well as incentivized action plans and policies for companies and investments, foreign investors can gain large profits from establishing energy-focused business opportunities in the country.
The Aspen Trust Group has a diverse portfolio of experience and services within Cyprus and between major international markets. Consult with our professional team to start taking advantage of Cyprus renewable energy investment opportunities from your headquarters office building to strategic investment models in key renewable energy development projects. Our energy production solutions can generate financial power for your business.