“Growth in the Sustainable Energy Business – Barriers and Opportunities”

1. Reforming: One way street to positive growth “Growth in the Sustainable Energy Business – Barriers and Opportunities” Anthi Charalambous Director of the Cyprus Energy Agency Member of the Cyprus Employers & Industrialists Federation (OEB)

2. Towards Green Growth • As green growth means fostering economic development while protecting the environment and thus not wasting natural resources while ensuring the well-being of citizens. • The investments and innovation need to be transformed, in order to support a sustainable development and create new economic opportunities. Sustainable

3. Green growth in the EU • The European Commission presented its initiative for Green Growth (2014) to support the structural shift towards green growth by maximizing employment opportunities. • There is considerable potential for creating new jobs in the production of energy from renewable sources and by increasing energy efficiency in buildings. • Example: The construction sector could create 400,000 new jobs by constructing more energy efficient buildings that meet the requirements of the Directive on the energy performance of buildings.

4. Energy poverty (fuel poverty) • In the EU, more than 50 million citizens do not have normal thermal comfort and this is related to the energy poverty. Source: Buildings Performance Institute Europe (2013)

5. Can Cyprus move towards green growth?

6. Green growth • Productivity: Incentives for efficient use of energy and natural resources and reduction of wastes. • Innovation: Fostering innovation in Cypriot businesses. • New markets - New jobs: stimulating demand for green technologies, goods and services create new employment opportunities. • Trust: Strengthening investor confidence through greater predictability and stability.

7. 1. Productivity is related to energy cost • The cost of energy imports for Cyprus exceeds 1.1 billion and this accounts more than the 18% of the country's total imports Source: Energy Service (2014)

8. Percentage of passenger cars, ΕU-27 Vehicles per 1.000 persons Source: Eurostat (2013) Growing number of vehicles • The number of motor vehicles per 1,000 persons has risen by 40% since 1991 • Among the Member States there are huge differences • In nine (9) Member States corresponds at least one car in every two people

9. Freight in Europe ΕΕ-27 Σιδηροδρομικές μεταφορές 17 % ΕΕ-27 Οδικές μεταφορές 77 % ΕΕ-27 Εσωτερικές πλωτοί οδοί 6 % Εσθονία Τσεχική Δημοκρατία Σλοβακία Αυστρία Λιθουανία Σουηδία Βουλγαρία Φινλανδία Ουγγαρία Γαλλία Ηνωμένο Βασίλειο Δανία Πορτογαλία Λουξεμβούργο Ελλάδα Μάλτα Νορβηγία Ισλανδία Κροατία Λεττονία Ρουμανία Γερμανία Βέλγιο Πολωνία Σλοβενία Ιταλία Ισπανία Ιρλανδία ΠΓΔΜ Τουρκία Κάτω Χώρες Κύπρος ΕΕ-27 Κατανομήτωντρόπωνμεταφοράςστιςμεταφορέςφορτίωνανάχώρα, 2009 % σεσύνολοεσωτερικώντονοχιλιομέτρωνεμπορευμάτων Source: Eurostat (κωδικόςηλεκτρονικώνδεδομένων: tsdtr220)

10. Differences in the electricity prices Mean electricity cost in households, 2035 cents/kWh 25 20 2011 OECD average 15 10 2011 Non-OECD average 5 China United States European Union Japan Average electricity prices are expected to increase with the highest exist in the EU and Japan, much higher than those in China and U.S. Source: European Commission, DG Energy (2013)

11. GDP per person

12. Energy Intensity of the EU economy Source: Eurostat(2012)

13. Energy intensity of Cyprus economyFinal energy consumption 2010-2012 (Gross inland consumption divided by GDP) In the period 2010 - 2012, final energy consumption and consumption of electricity fell to an annual average of 4.6% and 4.4% respectively In recent years the domestic energy system steadily declining energy intensity of the economy. Source: Energy Service (2014)

14. 2. Technology and Innovation • Technology can be transformed from a significant part of the problem to a decisive element of the solution. • Green growth does not need less or more primitive technology. • Most of the old technologies are not environmentally friendly. • Generally, the way to exploit natural resources is directly linked to the type of technology used. • Renewable technologies are those that ensure renewability of resources and protecting the environment.

15. 2. Technology and Innovation • Results of 2014 for 25 different indicators for innovation Source: European Commission – Innovation Union Scoreboard (2014)

16. 2. Technology and Innovation Cyprus Expenditures in research and innovation in Cyprus in €1000 Source: Cyprus Statistical Service(2012)

17. 2. Technology and Innovation Cyprus Expenditures in research and innovation in Cyprus in €1000 • 53% spent for labour costs • 33% other expenditures • 13% in capital investments • 39% natural sciences • 22% engineering and technology • 4% medical sciences • 11% agricultural sciences • 17% social sciences Source: Cyprus Statistical Service(2012)

18. The example of the Cyprus solar thermal manufacturing industry • Cyprus is the first country in the world for m2 installed solar panels per capita. • The industry began in 1960. From then until now have been installed 926.564 m2 solar collectors. • Until 1998 there was a large number of exports. • The Cypriot industry could not become competitive and the vast majority of solar panels are imported. Source: Cyprus Union of Solar Thermal Manufacturers (ΕΒΗΕΚ) and European Solar Thermal Industry Association (2013)

19. 3. New green jobs • The move towards green growth will create new jobs, such as specialized technical engineering positions to positions of blue collar workers. • Policies should focus not only on creating jobs but also on maintaining jobs. • Some job positions may be lost, and we need to facilitate the reallocation of workers (e.g through specific vocational training).

20. Green jobs projections– Cyprus In Cyprus, according to the "Roadmap" developed under the project «Build Up Skills - Pillar I" , project funded by the European Commission, estimated that needed at least 4,500 employees in 13 different green skills by 2020! Source: http://www.buildupskills.eu/national-project/cyprus

21. Cyprus roadmap for green skills Estimated minimum number of people on an annual basis to hold important green skills

22. Cyprus roadmap for green skills Estimated minimum number of people on an annual basis to hold important green skills

23. Green skills and occupational needs (ILO) Source: «Skills and Occupational Needs in Green Building»(Report by the International Labour Organization (ILO) on skills and occupational needs in green building)

24. 4. Strengthening investor confidence • Cyprus has chosen to promote renewable energy technologies and energy conservation by adopting annual Support Schemes. • These Support Schemes although they assist the investment have not been able to create a stable investment environment. • Also have not been able to maintain permanent green jobs.

25. The example of renewable energy enterprises - Cyprus • Total number of employees in companies operating in the renewable energy technologies (2011-2014) 854 660 582 485 Source: Cyprus Energy Agency and SEAPEK (2014)

26. The example of renewable energy enterprises - Cyprus • The problems facing enterprises in Cyprus operating in the filed of renewable technologies

27. The example of renewable energy enterprises - Cyprus • The problems facing enterprises in Cyprus operating in the filed of renewable technologies

28. Evolution of RESe installations 28 To achieve the national targets for RES share in final energy consumption 13% by 2020, is expected a rapid development of RES projects (small or large in Cyprus). The target for renewable electricity by 2020 is 16%. According to the National Action Plan for Renewable Energy in Cyprus target for total installed capacity of PV systems is 192 MW.

29. Eight (8) Basic steps for RES projects licensing • Total (8) steps for licensing renewable energy projects are: • 0. Preliminary – establishment of a company according to the national laws • Application Request for preliminary views on Department of Town Planning & Housing for obtaining preliminary views. If the opinions are positive, then 2. Application to CERA for exemption from CERA permit (<5MW) and at the final stage of the project application for an operation license (always depends on the capacity of the project). • ... 29

30. Eight Basic steps for RES projects licensing • ... • Application to the Department of Town Planning & Housing for issuing of the planning permit. The application for issuing of planning permit should be accompanied by the Study of Environmental Impact Assessment (PV projects> 100 kW). 4. The EIA Committee is responsible for examining the EIA and issuing the environmental terms of the project. 5.Application for building permit at the District Offices or Municipal Services that function as building permit authorities. 30

31. Eight Basic steps for RES projects licensing ... 6. Application to DSO or TSO for network connection (depending on the size (installed capacity) of the project), acceptance of the terms of payment and contract for electricity production. 7. Application for grant under the Support Schemes for RES and RUE, a grant agreement with the Management Committee of the Fund. 8. Construction of the plant, connection and Application to CERA for an operation license. 31

33. ΕΝΤΟΛΗ 2/2006 Example: The step 3 which is the application to obtain planning permit the Department of Town Planning & Housing is in consultations with 10 different Ministries/Departments: (a) The Ministry of Energy, Commerce, Industry and Tourism. (b) The Ministry of Agriculture, Natural Resources and Environment and the Departments of Forestry, Agriculture, Agrarian Reform, Geological Survey, Water Development, Fisheries and Marine Research and Meteorological and Environmental Services and Mining. (c) The Ministry of the Interior, the Department of Lands and Surveys, the relevant District offices and the Game Fund. (d) The Ministry of Communications and Works and the Departments of Electronic Communications, Electromechanical Services, Public Works, Road Transport, Civil Aviation and Antiquities. (e) The Ministry of Defense. (f) The Ministry of Health. (g) The Cyprus Energy Regulatory Authority. (h) the relevant Local Authority. (i) The SBA Administrator, in appropriate cases. (j) The Electricity Authority of Cyprus.

34. Example: The step 4 which is the EIA study approval by the relevant Committee for issuing the environmental terms of the project – in this Committee participate the following 9 Ministries/Departments Committee on Environmental Impact Assessment: 1. Ministry of Agriculture, Natural Resources and Environment 2. Ministry of Energy, Commerce Industry and Tourism 3. Department of Town Planning and Housing 4. Ministry of Communications and Works 5. Ministry of Labour and Social Insurance 6. Federation of Environmental Organisations7. Cyprus Scientific and Technical Chamber (ETEK)8. Two consultants 9. Local Authorities

35. Example: For the issuing of the building permit (Step 5) required opinions from: • The Fire Service • Local Authorities • Department of Water • etc ... (all relevant Services in accordance with the District Administration Offices) Lambros PV Park

36. ΕΝΤΟΛΗ 2/2006 Total: 58 areas: 27,1 % of the total land area

37. Comparison of licensing procedure in MED Countries (PV<1MW)

38. Large PV parks through a tender procedure Regarding this tendering procedure 24 projects approved with a total capacity of 50 MW in 2012. Today (2014) have completed testing and connection only four out of the 24 projects. If the licensing had been progressed in the period 2012 to 2014 would have invested in Cyprus in RES 55 million Euros. Would have been created 100 new jobs Source: Energy Service (2014)

39. Conclusions • The licensing process in Cyprus for installing renewable technologies can be classified as complex and complicated because many different Departments / Services take part in the licensing process. • In some cases the time authorization even for small PV Parks exceeding two years and this is a deterrent for some investors. • The process involves hidden costs for which investors are not aware from the outset. • Time limit on applications for grant / sponsored by the Schemes, there is no electronic application system. • Creation of a "pin map". That is a map which will indicate areas that are suitable for photovoltaic, solar thermal or wind farms. This will allow for faster service to interested investors. • Creation of “one stop shop” that will handle all the procedures for issuing permits for RES projects. This section will be staffed by people of various Ministries and Departments (eg Department of Building and Housing, etc).

40. Looking ahead! Economic tools are an important way of intervening to promote green growth and employment. Taxes, subsidies, CO2 allowances etc. is sometimes more effective tools than traditional legal settings. But by themselves are not enough, a simplification of procedures is needed and creation of a stable investment environment. Promoting energy reduction and renewable technologies through diversification of the national energy mix. Technological challenges and investment in innovation.

41. THANK YOU Member of the Cyprus Employers & Industrialists Federation (OEB) "Ενεργειακό Γραφείο" Cyprus Energy Agency (Ενεργειακό Γραφείο Κυπρίων Πολιτών)Tel. +357 22667716 +357 22667726Fax: +357 22667736 anthi.charalambous@cea.org.cy www.cea.org.cy