Filenews 30 April 2023 - by Christakis Chatzilaou*
According to press information and information from other sources, by 2030 the implementation of a number of important conventional production projects, the arrival of natural gas, increased RES penetration, as well as the operation of the "EuroAsia" interconnection are expected. It is noted that in case all these projects are mainly developed to meet the demand of the small electricity system of Cyprus, some of them may face a sustainability problem, with a possible impact on the price of electricity.
In the context of a previous relevant article, we had highlighted a potential problem of sustainability of electricity generation projects for 2030 and had suggested possible ways to address it. For completeness and better understanding of the magnitude of the problem, it has been deemed appropriate to analyze in this article the viability of electricity generation projects for 2030, on the basis of the following scenario, which is considered as a possible development.
Demand and production development
Based on data and data from the small electricity system of Cyprus, production to meet electricity demand in recent years has been hovering around 5,000 GWh. According to the approved forecast of the total electricity produced 2022-2030, the TSO, the annual production to meet electricity demand for 2030 is expected to fluctuate around 6,000 GWh. Therefore, production to meet annual electricity demand until 2030 is expected to range between 5,000 - 6,000 GWh.
Regarding the development of electricity production to meet the demand of the small electricity system of Cyprus until 2030, the following important developments are expected to take place:
- Integration of EAC Unit 6 into Vasilikos Power Station
- Integration of conventional private electricity producers
- Further penetration of Renewable Energy Sources (RES)
- Operation of the EuroAsia interface
- Advent of natural gas
They are all important and useful projects, whose capital investment will amount to many hundreds of millions of euros. Most of these projects are competitive with each other and aspire to satisfy the largest possible share of the demand of the electricity system of Cyprus. Subsequently, a summary of these projects will be attempted, with an indicative estimate in relation to their expected contribution to meet the demand of the small electricity system of Cyprus.
Integration of EAC Unit 6
The Republic of Cyprus has asked the European Commission to extend the operation of the ageing steam turbines (360 MW) of Dhekelia Power Station, which will be withdrawn until 2028. Combined Cycle Unit 6 (160 MW) is already in the process of being integrated into the electricity system, which is expected to be connected and operational at Vasilikos Power Station by 2025. According to TSO's Ten-Year Transmission System Development Plan 2023-2032, published for public consultation, it is estimated that in 2030 EAC will have an installed contractual capacity of 1,278 MW (it is estimated that EAC will withdraw without replacing the aging steam turbines of Dhekelia Power Station). In case of full utilization of EAC's conventional units, an annual electricity of 2030,11 GWh could be produced by 200.
Conventional private producers
According to the published for public consultation Ten-Year Transmission System Development Plan 2023-2032 of the TSO, it is estimated that by 2030 two new private conventional producers will be integrated into the electricity system, and specifically in the Vasilikos area, with a total installed capacity of 365 MW. If the conventional units of private producers are fully utilised, a maximum annual electricity of 3,200 GWh could be produced.
Penetration of RES production
By 2030, 1,150 MW of installed RES production capacity are expected to be integrated into the electricity system of Cyprus. If the capacity factor of these systems is 18%, then the annual electricity produced could reach around 1,800 GWh (estimated annual RES penetration for 2030 of 30%).
Analysis and evaluation
For the purpose of drawing conclusions, the scenario of the state of affairs expected to apply to the electricity system of Cyprus in 2030, in relation to the development of electricity production, will be analyzed and evaluated. The annual electricity demand will be in the order of 6,000 GWh and can be satisfied by EAC's conventional units, private conventional producers, RES production and interconnection.
Taking into account that RES production has a distribution priority over conventional generation, then the demand that remains to be satisfied by the rest will be in the order of 4,200 GWh. Taking into account that the scenario that will be further studied as the prevailing one has set as a condition that the price of electricity of the interconnection will be advantageous for the Cypriot consumer, then the annual imported electricity will be in the order of 2,000 GWh. Therefore, the demand that remains to be satisfied by conventional production (EAC and private producers) will be in the order of 2200 GWh.
In view of the fact that the maximum electricity produced, in case of full use of all conventional units, amounts to around 14,400 GWh, it is concluded that the utilization rate of these units will be of the order of 15%. With a utilisation rate of 15%, it is no exaggeration to say that some of the projects involved in conventional electricity generation may face a sustainability problem.
For comparison purposes, it should be noted that the average utilisation rate of existing EAC conventional units is currently around 32%. According to the relevant literature, however, the utilization coefficient of conventional base units, under normal operating conditions, should be around 80%. In this respect, it should be noted that the utilisation factor is the percentage of electricity produced annually by conventional plants, in relation to the energy that could be produced if conventional production had been connected throughout the year at its rated capacity.
In addition, there should be a strong concern whether with a utilization rate of conventional production of 15%, in addition to the viability of conventional production projects, an issue may arise with the viability of the natural gas project, since in such a case the quantities of natural gas consumed will be dramatically reduced. In this regard, it is noted that the utilization rate is further reduced in the event that EAC implements its decision in principle to replace the steam turbines at Dhekelia Power Station with new conventional units.
EuroAsia interconnection and import-export
By 2030, the EuroAsia Interconnection is expected to be operational, with a capacity of 2,000 MW. It will therefore be possible to transport electricity to and from the interconnection countries.
According to press reports, a maximum electrical capacity of 1,000 MW can be supplied to and from the electricity system of Cyprus. In case the price of electricity of the interconnection will be advantageous for the Cypriot consumer, then electricity can be imported into the electricity system of Cyprus. Taking into account that there are likely to be safety restrictions on the import of electricity, for the purposes of further analysis it is assumed that import will be allowed to satisfy only 30% of demand. In such a case, the annual imported energy through the interconnection will be in the order of 2,000 GWh.
In my technocratic view, this introduction scenario is the best prospect and the optimistic scenario for conventional production. Regarding the export of electricity to other countries, it should be studied by stakeholders whether the conventional production of the electricity system in Cyprus will be able to offer energy at lower prices compared to the other interconnection countries.
Conclusions and torturous questions
Based on the scenario that has been analyzed in the above text and is considered as a possible development, with the inclusion of additional conventional production in the electricity system of Cyprus, as well as the operation of the interconnection, it is estimated that by 2030 there will be a significant reduction in the utilization rate of conventional production, which, from 32% today, It will plummet, according to an optimistic scenario for conventional production, to 15%. This potential raises serious concerns in relation to the low degree of utilization and exploitation of conventional production and natural gas projects and the impact it will have on both the viability of the projects and the price of electricity.
Therefore, the crucial question hangs agonizingly: Are all these competing production projects excessive and not entirely necessary – in the form they are being developed without elements of central planning – for the small electricity system of Cyprus? In conclusion, it is noted that all this refers to the conclusion that was drawn in our previous article, that Cyprus obviously does not have a Production Development Program and everything has been left to market forces to decide.
* Electrical Engineer, with many years of experience in the operation of the electrical system
