Filenews 9 March 2025 - Christakis Chatzilaou
In the context of a previous article through "Fileleftheros", we had pointed out the serious problems of adequacy and safety in the electricity system of Cyprus and had given suggestions for possible solutions.
After two years of writing, almost nothing significant has changed in the electrical system, except for the huge increase in photovoltaic penetration – without storage!!– and the forced continuation of the operation of the polluting and costly steam turbines of the Dhekelia power station for electricity efficiency purposes.
Due to these negative developments, combined with the distortions in the transitional arrangement for the electricity market, an unbearable increase in the price of electricity for the majority of consumers is caused, which is invoiced by the Electricity Authority of Cyprus.
In view of the above, and in relation to the recent serious electricity adequacy problems, it is appropriate to update our views on adequacy and try to clarify some relevant definitions and concepts in order to contribute to the development of a useful public debate on electricity adequacy.
Security of supply to the consumer
In order to achieve the secure supply of electricity to the Cypriot consumer, there must, on the one hand, be sufficient electricity (i.e. the available installed power generation of the production units must cover the demand for electricity by consumers) and on the other hand security in the operation of the electricity system.
Based on the current legislation, CERA has, inter alia, the responsibility for ensuring satisfactory long-term adequacy and the TSO for the safe operation of the electricity system. In the context of safe operation, the TSO is responsible for maintaining the basic parameters of the electrical system – frequency, voltage, redundancy – within the limits, as defined by the current legal framework.
Electricity sufficiency
In order to have satisfactory long-term adequacy in electricity, the installed capacity reserve margin should be between 20 – 40% (Decision No. CERA 144/2017 / Calculation Methodology for Installed Power Reserve Margin).
The installed capacity reserve margin, which must be ensured by CERA on a long-term basis, is defined as the ratio of the difference between the available installed power generation and the maximum annual electricity demand versus the maximum annual electricity demand (Pinstal-P max/ Pmax).
Then, if a sufficient reserve margin is ensured by CERA, the total available installed capacity is made available to the TSO, which must ensure operational adequacy in electricity (i.e. safe satisfaction of electricity demand) at all times.
In the context of ensuring operational adequacy, the TSO takes into account, inter alia, the Operating Margin Policy, the official demand forecasts, the estimated failure rate as well as the annual maintenance plan of the production units.
Operating Margin Policy
The TSO's Operating Margin Policy specifies that, in order to ensure satisfactory operational adequacy, the electricity system should operate with at least 40 MW rotating reserve from synchronous generation units and 130 MW replacement reserve (e.g. fast start generating units that will cover the possible loss of the largest conventional unit).
The sum of 40 MW of rotary reserve and 130 MW of replacement reserve, i.e. 170 MW, shall constitute the minimum permitted operating margin to ensure marginal operational adequacy.
In case the minimum permitted operating margin is not ensured, then a shortage of electricity arises and an alarm should be declared in accordance with the Transmission Rules and immediate measures should be taken to restore the limit operational adequacy.
Deficiency in summer 2025;
Based on the definitions and concepts, as explained above, we will attempt to determine whether summer 2025 ensures satisfactory, both long-term and operational adequacy.
Long-term adequacy
For the summer season 2025, according to the published draft for the Ten-Year Transmission Development Plan 2025-2034 of the TSO, a maximum demand for the transmission system of 1,200 MW has been forecast. Taking into account that the total available installed capacity of conventional units for the summer season 2025 is estimated to be in the order of 1415 MW, it is concluded that the reserve margin of installed capacity amounts to 18%.
It is noted that the available installed capacity of 1415 MW does not include combined cycle unit no. 6 of EAC, as well as the combined cycle plant of the private producer PEC, which have been licensed by CERA to operate only with natural gas.
Therefore, with regard to long-term adequacy – for which CERA is responsible – and if a percentage between 20-40% is not ensured in accordance with CERA's Decision 144/2017 and provided that nothing has changed regarding this Decision, it is foreseen that during the summer season 2025 a shortage of electricity will occur. The exact percentage of the reserve margin, which in our estimation for the small and isolated electricity system of Cyprus should approach 40%, depends on the degree of aging as well as strain of conventional production units.
Operational adequacy
In order to assess the operational adequacy for the summer 2025 season, the TSO obviously after taking into account the relevant maximum provision for the transmission system (1200 MW), the total available installed power generation capacity -without maintenance- (1415 MW) and a failure rate of 15% (212 MW), will probably arrive at an operating margin of 3 MW, which does not meet the minimum permitted operating margin of 170 MW of the TSOC Operating Margin Policy.
It is noted that EAC's conventional production units are considered relatively old and are subject to systematic and frequent stress, as a result of the constantly increasing and at the same time uncontrolled penetration of RES (need for frequent connection and disconnection of conventional base units).
For this reason, the estimated failure rate of conventional production units, used to calculate the operating margin during the summer 2025 season, is of the order of 15%. Therefore, with regard to operational adequacy – for which the TSO is responsible – and if the minimum projected operating margin of 170 MW is not ensured in accordance with the TSOC Operating Margin Policy, it is predicted that during the summer season 2025 a shortage of electricity will occur.
Postscript in relation to the title of the article: We hope that during the summer season 2025 mild weather conditions and/or advantageous deviations from the forecasts of the TSO will prevail in relation to the maximum demand for electricity, as well as the rate of failure for conventional units, in order to prevent failure in electricity and operation of the electrical system without the required reserves, as has happened on 24/02/2025.
Conclusion – The next step
Based on the above analysis for long-term and operational adequacy and if extreme weather conditions prevail and the TSO's forecasts for peak demand and failure rate are verified, it is predicted that during the summer season 2025 electricity shortage will occur.
It is noted that, according to Article 34 of the Electricity Market Regulation Law 2021, in the event that the electricity adequacy assessment shows that the existing installed electricity generation capacity is not sufficient to ensure adequate electricity supply to the Republic and this makes it necessary to take measures related to capacity mechanisms, CERA must inform the Minister of Energy accordingly, in order to activate the foreseen procedure for the increase of installed capacity in electricity production.
* Electrical Engineer with many years of experience in the operation of the electrical system
