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In Cyprus, an issue regarding policy integration has been observed, since investments in a new fossil fuel power plant creating excess capacity are underway. Until 2005, measures that proactively supported renewable energy production, such as the New Grant Scheme, were not very ambitious. In Cyprus, targets are not being met. In 2006, a New Enhanced Grant Scheme was agreed upon. The leading RES in Cyprus is PV; wind power has a high potential.



RES-E policy in Cyprus is made up of the following components:

  • The New Grant Scheme, valid from 2004 until 2006. A tax of 0.22c€/kWh on every category of electricity consumption is in place. The income generated by this tax is used for the promotion of RES.
  • The New Enhanced Grant Scheme was installed in January 2006. Financial incentives (30–55 per cent of investments) in the form of government grants and FITs are part of this scheme.
  • Operation state aid for supporting electricity produced by biomass has been suggested, and forwarded to the Commission for approval.

Table I.4: FITs in Cyprus

Technology Capacity restrictions Duration 2005 2006 Note
fixed fixed fixed
years €/MWh €/MWh  
Wind No limit First 5 yrs 92 92 Based on mean annual wind speed
Next 10 yrs 48-92 48-92 Varies according to annual operation hours:
<1750-2000 h 85-92 €/MWh
2000-2550 h 63-85 €/MWh
2550-3300 h 48-63 €/MWh
Biomass, landfill and sewage gas No limit 15 63 63 A more generous scheme is currently being developed for biomass electricity. Up to 128 €/MWh is expected, depending on the category of investment
Small hydro No limit 15 63 63  
PV Up to 5 kW 15 204 204  
Without investment subsidy 15 x 337-386 Households receive higher tariff than companies.

Note: Exchange rate 1€ = 0.58 CYP


The Action Plan for the Promotion of RES determines that the contribution of RES to the total energy consumption of Cyprus should rise from 4.5 per cent in 1995 to 9 per cent in 2010. The RES-E target to be achieved in 2010 from the EU Directive is 6 per cent. In Cyprus, the RES share of total energy consumption decreased from 4.5 per cent in 1995 to 4 per cent in 2002.

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