Filenews 6 June 2023 - by Yiannis Antoniou
The updated energy policy of the new government provides for the rapid utilization of natural gas for the production of cheap electricity for the benefit of households and businesses, an issue that President Christodoulides ranks high on his priorities. Essentially, the Christodoulides government is reinstating the plan to transform Cyprus into a small but nerve hub for natural gas liquefaction in the Eastern Mediterranean.
Energy Minister George Papanastasiou is packing his bags for Israel to sign a memorandum of understanding that will set the political framework for the installation of an undersea pipeline that will connect the two countries' Exclusive Economic Zones. It was preceded by the meeting of the President of the Republic Nikos Christodoulides with the Israeli Prime Minister Benjamin Netanyahu, who shook hands on this ambitious plan, which is considered feasible and realistic.
The energy crisis caused by the Russian invasion of Ukraine has highlighted the need for Cyprus to become independent from geopolitical developments, which affect the energy market. Therefore, the exploitation of energy wealth is a one-way street, with the primary goal of producing low-cost electricity to meet the needs of the Cypriot market, i.e. households and businesses, which have been suffocating for years for cheap energy.
The pillars
Nicosia's updated energy policy has as its immediate objective the production of low-cost electricity, but the long-term stakes are of vital importance for Cyprus because they aim to enhance the security of the country's energy planning, to make Cyprus independent from international geopolitical events affecting energy prices, to lift the country's energy isolation. a competitive electricity market and a rapid transition to a green economy. "The utilization of natural gas is not an end in itself, it is the transitional stage to move more smoothly to the green economy," Energy Minister George Papanastasiou told Insider. "The green transition is an end in itself," he adds and explains that the update of Nicosia's energy policy is based on techno-economic criteria. Thus, in parallel with the efforts to develop Renewable Energy Sources and the process underway by the Natural Gas Public Company (DEFA) for the import of liquefied natural gas (LNG), which will then be regasified at the terminal of the Natural Gas Infrastructure Company (ETYFA is a subsidiary of DEFA), which is being constructed in Vasilikos for use in power generation, The government is putting forward as an alternative the import of gas in gaseous form via pipeline. The political will exists and will be formalized with the signing of the Cyprus-Israel memorandum to connect their EEZs to a pipeline, but from then on the companies will have the say.
Mr. Papanastasiou appears quite optimistic that the preliminary interest of the companies will be reflected in a more formal form at the workshop that will be organized in Nicosia by the ministry in cooperation with the Cyprus Hydrocarbons Company on May 29-30 under the title "The Cyprus Gateway: Natural Gas to Power and Liquefaction". According to the minister, companies active in the natural gas industry have been invited to the workshop and cover the entire production, supply and market chain, as well as the electricity chain. The aim is to present and discuss the prospect of transporting natural gas to Cyprus by pipeline, for electricity production and for promoting LNG export options. Pending issues between Cyprus and Israel remain the issue of the co-exploitation of natural gas from the deposits in the Aphrodite-Isai blocks. The dispute is being negotiated between the energy ministries of the two countries, with sources in Nicosia arguing that there is a high degree of convergence. However, the whole plan does not negate the intention to cooperate with Egypt and more specifically, for the transportation of natural gas from Cyprus to Egyptian terminals.
The technical part
According to the design, the gas will be transported by pipeline in gaseous form, liquefied and loaded onto LNG ships, as the European market now wants. For liquefaction, the solution seems to lie in the technology of Modular LNG Plants, which are smaller capacity units. These are essentially temporary facilities that can be dismantled and moved to another location. It is not the technology of the liquefaction terminal with the "trains", which we were talking about to be built in Cyprus at the beginning of the decade, with the first discovery of natural gas at "Aphrodite". Technology has developed and the trend of floating liquefaction stations (FLNG) and onshore prefabricated liquefaction stations (Modular LNG Plants) is gaining ground. Apart from the transportation of natural gas in gaseous form for liquefaction in Cyprus, the government's updated energy plan also provides for the utilization of the LNG Terminal in Vasilikos for the floating liquefied natural gas regasification storage unit (FSRU), for onshore and marine infrastructure. The combination of these two sources serves to meet the goals for the country's energy security and also contributes to the creation of conditions of competition that will allow the Natural Gas Public Company (DEFA) to obtain the cheapest fuel.
The timetable
The energy minister refrained from giving a time limit for when natural gas could be in Cyprus. However, he explains that from the moment there is the final decision of the company for the implementation of the project (Final Investment Decision) it takes 2.5 years. "We need to order the pipelines, the units, find the contractors, etc.," Papanastasiou said. It is important, however, that all this liquefaction work will work with green energy, which will be even cheaper because it will not be fined for pollutants. "We will make sure they work with green electricity. Our goal is the abundance of electricity that we are now rejecting, to store it and give it for production", adds the Minister of Energy and refers to the need to upgrade the electricity distribution network of Cyprus in order to be able to meet the increased needs.
Smart distribution grid
Although interest in installing photovoltaics is particularly high, Cyprus is among the EU countries that record a negative first in fossil fuel consumption. Distribution system upgrades and electricity storage projects are critical infrastructure that will disrupt the current landscape.
The inability to store energy remains a source of significant energy loss and loss of financial resources. For the first time recently, Cyprus experienced a significant loss of energy from renewable sources, due to the fact that the energy produced exceeded the demand and endangered the energy balance. The production-demand imbalance is observed in spring and autumn when temperatures are mild and do not require the use of heating appliances and air conditioners. The energy transition is an extremely difficult process since the rapid development of renewable energy sources for electricity generation is accompanied by huge challenges for electricity grids.
By May Insider
