Angelos Nikolaou
Revenue that is likely to approach or even exceed € 120 million is expected to have the Republic of Cyprus through the auction of greenhouse gas emission allowances for 2022. It is noted that for the past year the revenue was almost double from 2020 and reached € 77.3 million. As soon as revenues from auctions are increased, at the same time the cost of electricity for consumers will be even higher. Specifically, the final price of electricity includes about 40% of the cost of production per kilowatt hour, the cost of greenhouse gas emission rights and in particular carbon dioxide emissions.
Emissions in tonnes of carbon dioxide are calculated on the basis of the amount of fuel used in the EAC facilities. For 2021 the average price paid by the Authority was € 52 per right.
If one takes into account that for the needs of electricity generation from conventional fuels 3 million tons of carbon dioxide are used and the trading right now amounts to € 80, then it is estimated that an annual cost for the EAC of € 240 million will arise.
Therefore, if consumers are not given other options that do not include the cost of carbon dioxide in the competitive RES market, things will be even more difficult for households. It is noted that according to estimates, the production of kilowatt hours with cleaner fuel, such as natural gas, will reduce the cost of carbon dioxide, otherwise there will be a serious problem not only in households but also in the economy.
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According to EAC estimates, the advent of natural gas as a fuel bridge in electricity generation will help reduce emissions allowances by 30%. An even greater reduction in the price of electricity generation will occur with the increased penetration of RES.
In particular, in the long run, the operation of the competitive energy market in 2022, the integration of energy storage technologies, which will help increase the percentage of cheaper renewable energy, reducing our dependence on fossil fuels, will help reduce energy costs. which are determined by exogenous factors.
As the forecasts for the cost of pollutants do not differ, tourists who are expected for this year may find it difficult to come to Cyprus, since only for hotels the cost of electricity is 30% of their operating costs.
Through the rights trading system, Cyprus has been auctioning rights since 2012 and all the proceeds from the auction end up in the permanent coffers of the state and through the respective annual budgets the policies and measures to achieve the green development goal are implemented. They are even used in social benefits, such as measures to support businesses and workers during the pandemic.
According to official data, in the last five years, about 1.5 million are auctioned annually with the price being unpredictable, hence the income of the Republic. However, the trend has been increasing in recent years and the average price from € 5 per right that was in 2017, reached € 15 in 2018, € 24 in the two years 2019/2020 and € 52 in 2021. In recent months the price has stabilized around € 80 per right and therefore the revenue is expected to be multiple compared to previous years. It is estimated that they will approach € 120 million. In 2021 the revenues were € 77 million, in 2020 € 39.2 million, in 2019 € 25.7 million, in 2018 € 25.5, while in 2017 the revenues were € 6.3 million
Incentive schemes for energy storage systems
For the period 2021-2027 the Ministry of Energy has secured from the EU (Structural, Continuous, Fair Transition, SAA) € 334 million from co-financed funds for the promotion of projects under the green economy, as well as € 208 million for the promotion of entrepreneurship, much of which will be devoted to green growth.
Within 2022, the Ministry of Energy will announce Sponsorship Plans amounting to over € 82 million for: a) Energy upgrade of businesses and local authorities, € 40 million b) Energy upgrade of homes, € 35 million c) Thermal insulation, RES installation and stations charging of electric vehicles (double sponsorship in the mountains), € 7 – 8 million.
It is emphasized that other plans are under study to provide incentives for energy storage systems, creation of partnerships in the business sector, energy efficiency in new buildings.
In environmental actions the revenues of pollutants
50% of the proceeds from the auction of allowances should be allocated to specific environmental actions related to the reduction of greenhouse gas emissions. It turns out that for the period 2013-2021 it is a multiple of the total related revenues. The Ministry of Agriculture, Rural Development and Environment has allocated for the period 2017-2021 more than € 1.4 billion for actions related to green development, such as to support the agricultural sector, environmental protection and the management of our natural resources resources. Another € 343 million will be allocated by the Ministry of Agriculture, within 2022, to achieve the objectives and projects that are in progress or have been planned.
The Ministry of Energy, Trade, Industry and Tourism in 2021 announced sponsorship plans for the promotion of RES and Energy Saving totaling € 49.7 million. The plans concern: a) Saving / Upgrading homes, € 35 million. b) Sponsorship plan for thermal insulation of roof, installation of photovoltaic and solar water heaters, € 7.7 million c) Plan for support of industries / energy upgrading of residences / new entrepreneurship within British Bases, € 2 million vulnerable households (boosting energy savings) € 5 million
Plans of the Ministry of Transport, Communications and Works provide a sponsorship for the purchase of electric vehicles or the purchase of an electric bicycle (assisted cycling), amounting to € 8 million and the plan for the withdrawal of polluting vehicles from traffic amounting to € 4 million.
