I. INTRODUCTION
Cyprus is an island EU member state located in East Mediterranean. The electricity supply system of the country is currently based on oil-fired generation. There is also small but increasing renewable energy contribution [1] mainly by solar, wind and biomass projects [2]. Besides the exploration of hydrocarbons in the Exclusive Economic Zone (EEZ) of the Island has exposed significant offshore reserves of natural gas. The recoverable natural gas quantities are estimated by the Government and foreign energy institutes to be up to 200 tcf and they are expected to become available for use in the forthcoming years (Cyprus Institute of Energy, 2012 cited in [3]). In this framework, this paper searches the potential of Cyprus energy resources to increase island energy sustainability. An internal and external context analysis is gathered and a SWOT (Strengths, Weaknesses, Opportunities, Threats) matrix analysis try to identify barriers and enhancers (qualitative and quantitative) to improve system sustainability.
II. METHOD
A. SWOT analysis
The SWOT methodology is a strategic analysis tool that combines the strengths and weaknesses study of an organization, territory or sector with the study of opportunities and threats in its environment [4]. SWOT analysis derives its name from the words strengths (S), weaknesses (W), opportunities (O), and threats (T). Strengths are positives and weaknesses are negatives related to system internal factors. Opportunities are external factors that have a positive interaction with the system and the negative effects of the system environment represent Threats to the system [5]. According to Islam and Mamum [6] SWOT analysis is an effective tool, able to support the policymakers.
SWOT analysis method is broadly used in energy planning related research. For example Fertel et al. [4] have performed a SWOT analysis of the energy and climate policies of Canada to analyze policy coherence between federal and provincial/territorial strategies. The tool has also been used in combination with PESTLE (or PESTEL i.e. Political, Economic, Social, Technical, Environmental, Legal) analysis to analyze the possibilities and the challenges of implementing Renewable Energy in island countries [6]. In other research ANP and fuzzy TOPSIS – based on SWOT analysis of Turkey’s energy sector has been performed to formulate and holistically analyze the energy strategy alternatives and priorities [7] and to evaluate the strategies of compressed natural gas industry by using an integrated SWOT and MCDM (Multi Criteria Decision Method) approach [8]. The method is also used in non-academic analysis e.g. is presented for Argentina Oil & Gas sector [9].
B. Analysis method
SWOT analysis even if is well structured, it is often subjective and may be difficult to reach a consensus about its results [4]. This may be prevented if the data used are extensive and accurate. An effective SWOT analysis preparation assumes an extensive definition of the internal and external context of the sector. The internal and external factors should be well defined prior to the SWOT analysis [4]. In this framework Cyprus energy resources strengths, weaknesses, opportunities and threats are obtained by an extensive recording of the sector context. The outline of each context factor is based on the review of secondary data collected and gathered from academic literature as well as other data sources e.g. government, national or international organizations websites, reports etc. Review of the internal and external environment data leads to a consequent SWOT matrix. The method used in this paper to identify S, W, O and T is briefly presented in Fig. 1.
Sustainability has three dimensions the social, economic and environmental but in a decision making process it is important to add the institutional dimension also [10]. As the analysis requirement is to increase sustainability the Cyprus energy resources context is reviewed in a three plus one component view i.e. social, economic and environmental plus institutional context and the SWOT factors are concluded accordingly.
According to [4] it is difficult to distinguish between internal and external factors and this may lead to confusion between strengths and opportunities or between weaknesses and threats. External factors are these outside the control of the system and internal are these within the control of the system [11]. In order to avoid confusion for every context component during analysis and results formulation is used this interpretation. The interpretation process is presented in Fig. 2.
III. CYPRUS ENERGY RESOURCES CONTEXT
A. Institutional context
Cyprus is an island member state of EU since 2004 which political system is Presidential Republic. The country after 1974 is divided into two parts. The southern sector is controlled by the Republic of Cyprus and the northern sector is administered by the Turkish Cypriots [12]. In this paper only Republic of Cyprus data are identified and taken into consideration.
Energy policy of the country is advised by the Energy Service of the Ministry of Commerce, Industry and Tourism. The energy policy of the Republic of Cyprus government is fully harmonized with the energy policy of the European Union and has three main axes. The market healthy competition ensuring, the energy supply securing and the country energy demands satisfaction, with the smallest burden on the national economy and the environment [13]. Environmental policy of the Republic of Cyprus is advised by the Department of Environment of the Ministry of Agriculture, Rural Development and Environment. The Department mission is “to protect the environment through effective management, and strengthening public awareness for the benefit of public health, quality of life and against loss of biodiversity both for today’s society and future generations” [14].
Another energy system stakeholder is Cyprus Energy Regulatory Authority (CERA) which has been established according to EU directives and is the national authority responsible to supervise and monitor the country electricity and natural gas market. It ensures the effective and healthy market competition, protects consumer interests and ensures the safety, quality, sufficiency, continuity and reliability of energy supply. Besides CERA encourages Renewable Energy use [15].
Traditional fossil fuel-based energy sources face a serious challenge for their future use because of the Kyoto Protocol greenhouse gas (GHG) reduction targets [16]. EU energy targets set for 2030 are to reduce up to 40% of GHG emissions compared to 1990 levels, at least 27% share of renewable energy consumption and at least 27% energy savings compared with the business-as-usual scenario [17]. These targets commit Cyprus Government to a similar energy planning. As a European Country, Cyprus has implemented policies promoting renewable energy and energy efficiency measures in compliance with the relevant EU legislation [18]. Such policies include subsidy schemes [19], feed in tariffs and net-metering supporting schemes [20]. PV projects competitive auctions licensing have also been organized in Cyprus [21].
According to EU policy, National Governments have control over the oil and gas in their territories. They determine the areas in which companies may search for and produce the resources but when granting licenses for these areas they must follow a set of common EU rules to ensure fair competition [22]. Where this option is chosen, as in Cyprus, the member states must exploit hydrocarbons taking into account the decarbonisation priorities [23]. Cyprus Government has completed three hydrocarbons exploitation licensing rounds in island EEZ so far [24]. Island offshore exploration blocks are presented on Fig. 3.
In Cyprus there is a unique kind of a mixed legal system, where “core” private law, criminal law and procedural law follow the English common law, and public law and certain private-law enclaves are strongly oriented towards continental models [26]. Energy activities are regulated by several laws and regulations. Environmental legislation requires Environmental Impact Assessment for energy infrastructure projects including natural gas projects and renewable energy, with the exception of under 100 kW PV projects [2, 27]. Safety and Health at Work Laws of 1996 to 2015 and the related regulations implements to the energy activities as well [28].
Renewable energy systems can reduce the ability of single countries to exert pressure or influence on individual countries or groups of countries, although they can cause supply vulnerability to a user i.e. EU from a political action from a supplier i.e. North Africa. They can also reduce border conflicts as are depended to less centralized resources and the risk to be used as a strategic tool is also reduced. Smaller scale of renewables comparing to fossil fuel will reduce the risk of tension. However conflicts regarding renewables have already been noticed and new problems such as food security because of land availability reduction, materials scarcity and terrorist attacks to energy supply and transmission facilities are connected to renewable energy [29]. Oil income has also a positive effect on state sponsorship of terrorism, on domestic terrorism and on the proportion of terrorist incidents with oil facilities as targets [30]. On the other hand island hydrocarbons development could potentially be a catalyst for a Cyprus problem settlement [12].
During 2017 Cyprus, Greece, Italy and Israel gave their support to moving forward with the East Med pipeline project to carry natural gas from Israel and Cyprus to Europe, setting a target date of 2025 for completion. The pipeline, which the Commission has identified as a Project of Common Interest, has the potential to diversify EU gas imports. In addition to providing access to the Israeli offshore gas fields, it would facilitate production in Cyprus, in particular in the Aphrodite field. Although, Cyprus is not a gas producer yet, has significant potential due to the fact that it has the seventh largest gas resources and the largest deepwater resources among EU countries [31].
B. Social context
Energy and society have a coevolutionary relationship. As material properties of energy inputs influence a society structure and population size and establish the parameters around, and expectations for, social and economic life, only specific technological and social conditions reposition a physical entity as ‘energy resource’ [32].
The population of Cyprus is estimated at 952,100, of whom 684,000 i.e. 71,8% belong to the Greek Cypriot community, 90,100 i.e. 9,5% to the Turkish Cypriot community and 178,000 i.e. 18,7% are foreign nationals residing in Cyprus [33]. The expectation of life at birth is estimated at 79,8 years for males and 83,5 for females [34]. A 36% of the population above 20 years old has completed tertiary education [35].
In Cyprus there is an ongoing ethnic partition between the Greek Cypriot majority and the sizeable Turkish-Cypriot minority. This partition is in the heart of the Cyprus conflict. The two communities do not live together for the last 50 years and the island is divided in two ethnically homogenized parts, the Republic of Cyprus in the southern part practically dominated by the Greek-Cypriots, and the ‘Turkish Republic of Northern Cyprus’, a formation that is recognized only by Turkey. Last years there is a relative freedom of movement across the dividing line of the two parts but the partition still remains in place [36].
Social acceptance for technological change is one of the key issues to adopt a sustainable and renewable energy system [35]. Energy infrastructure development is influenced by Not In My Back Yard (NIMBY) phenomenon [37, 38]. Although renewable energy is generally positively perceived by the public and highly accepted [39, 40, 41] it is observed renewable projects to meet local resistance [42]. Regarding oil and gas industrial activities, empowered citizens and civil society organizations are not satisfied with how national governments and private sector companies are implementing its development [43] and social resistance for extraction activities is also met [44]. Nevertheless there are practices to ensure energy infrastructure acceptance [37].
Renewable energy adoption has the potential to create jobs and job opportunities [45, 46], as well as the drilling process [47]. According to Akella et. al, [16] renewable energy systems can develop more jobs than conventional energy-supply projects. The last years unemployment in Cyprus shows a decreasing trend [48] and total employment is forecasted to grow for the next years [49]. Electricity supply and natural gas sector is forecasted to have new employment needs for the next years as well i.e. from 1930 positions in 2017 to 2079 in 2027 [50].
C. Environmental context
Cyprus has a Mediterranean climate with mid-May to mid-September dry summers and November to mid-March rainy, rather changeable, winters separated by short intermediate autumn and spring seasons of rapid change in weather conditions [51]. Due to semiarid climate, island water resources are consider to be very limited [52]. Cyprus also faces challenges with the exceedance of air quality limits and compliance with the relevant European regulatory standards [53]. Moreover in Cyprus are generated high municipal solid waste volumes [54].
Fossil fuel energy production that dominates Cyprus energy system, is closely connected with a number of environmental impacts as abiotic depletion, acidification, eutrophication, fresh water aquatic ecotoxicity, global warming, human toxicity, marine aquatic ecotoxicity, ozone layer depletion, photochemical ozone creation and terrestrial ecotoxicity [55]. Due to the climate change concerns a momentum towards phasing out fossil fuels is gaining traction [56].
Renewable energy sources on the other hand are non-exhaustible and environmental friendly [57]. The benefits of producing electricity from Renewable Energy sources including the reduction of GHG emissions are well known [58]. However they present some environmental impacts such as land change, emissions, visual and aesthetic impacts, soil erosion, biodiversity effects, glare, risk from toxic materials, noise and odour [2, 57, 59]
Natural gas is a versatile fuel and its growth is linked in part to its environmental benefits relative to other fossil fuels, particularly for air quality as well as GHG emissions [60]. To reduce CO2 emissions to the atmosphere [61], less carbon-intensive fuels (than coal) like natural gas is included in the technological options.
Cyprus natural gas reserves have been found offshore. Offshore hydrocarbon exploration and production are associated with significant potential impacts to the environment which may include marine pollution and toxicity, benthic disturbance, impacts to wildlife, birds and fish, biological depletion, loss of archaeological heritage, health and safety incidents, atmospheric emissions and drilling fluids, muds and cuttings as well as other solid and fluid waste production [62, 63, 64]. Accidents on offshore platforms may result to severe environmental damage also [65, 66].
D. Economic context
Cyprus is a Euro Zone country since 2008, with provisional GDP at market current prices for 2016, € 18.122,5 million [67]. Cyprus provisional GDP per capita for 2016 was € 21.300 when the euro area mean was € 31.600 [68]. Country GDP growth rate during the third quarter of 2017 was positive estimated at + 3.8 % comparing to the same quarter of 2016 [69].
A financial and economic crisis in 2013 resulted Cyprus to require bailout by international creditors. This led to a 10 billion Euro program conjointly funded by the EU and IMF. The program also included the government’s obligation for a number of reforms as the privatization of state-owned assets, utilities and services that would raise about 1.4 billion euro [70]. Cyprus has already exited from the economic support program and fifteen months after the exit Cyprus’s economic growth was evaluated as broad-based [71].
The electricity supply system of Cyprus is currently based on oil-fired generation. There are three thermal power stations in Cyprus with a total installed capacity of 1478 MW mainly produced with heavy fuel oil [72]. Installed renewable energy plants in Cyprus include 14 biomass/biogas units with 9,714 kW capacity, 1931 Photovoltaic systems with 70,322 kW capacity and 5 wind parks with 157,500 kW capacity [73]. Renewable energy penetration by renewable type in Cyprus electrical system for 2015 which was a total of 8.5 % is presented in Fig. 4.
Energy demand in Cyprus is prospected to rise calculated to be 5% to 44% higher in 2040 than that observed in 2010 [18]. Historical data and approved long term forecast of annual total generated electricity in Cyprus is shown in Fig. 5.
While per capita income has a negative impact on Renewable Energy deployment, economic growth seems to be neutral [76]. Due to the high volume of organic and biodegradable waste that Cyprus generates, could be able to produce biogas through anaerobic digestion in order to cover a significant share of islands electricity consumption [77]. Hence according to [78] on the island exist specific areas with unique winds (more than 10 m/s) and the production energy from wind parks may be an option. However it is well known that wind energy, wave energy and biomass have limited potential in Cyprus and the only inexhaustible natural source of energy that Cyprus possess abundantly, is solar energy [79]. In addition photovoltaic parks seems to be the most efficient renewable energy projects in Cyprus [2].
The recent discoveries of offshore natural gas in the exclusive economic zone of Cyprus has the potential within a decade to disengage the production of energy from imported oil products, and to improve the trade balance in order to reduce the cost of electricity to the economy [1]. On the other hand the gas – fired generation is squeezed by the rising deployment and falling costs of renewables [80]. Apart of Cyprus, Israel [81] and Egypt [62] have also started hydrocarbons development in their EEZ.
Cyprus face a serious challenge in order to be the main connect player between Mideast and Europe. European estimated gas import bill was close to 20 billion € during the first quarter of 2017 while LNG imports reduced by 5% the same period. The EU gas consumption in annual base reached nearly 5000 TWh (equal to 465 bcm). If it is considered that two member states are the biggest consumption countries (UK and Germany with 58% of the annual gas consumption), Cyprus can be the leading country to share gas to Europe from Egypt and Israel to Greece and then to EU [31].
Due to smallness and/or remoteness, Cyprus insular energy system is incapable to interconnect with other electricity generators and consumers through a wider transmission grid outside the island [3]. However EastMed project current design envisages a 1.300 km offshore pipeline and a 600 km onshore pipeline to interconnect Eastern Mediterranean sources to Cyprus and Cyprus to Greece [82]. Besides an electricity interconnection between the grids of Israel, Cyprus and Greece through a subsea DC cable with a total capacity of 2000 MW has been approved [83].
IV. RESULTS
The analytic interpretation of the above Cyprus institutional, social, environmental and economic energy resources context results to the SWOT matrix presented in Table 1. Strengths, weaknesses, opportunities and threats are categorized according to the sustainability three plus one pillars classification and are segregated by the method in Fig. 2.
Main Cyprus energy resources sustainability enhancers i.e. strengths and opportunities include country legislation and energy policies and targets mainly originated by EU and Eurozone membership, highly educated population, potential of environmental, social and economic benefits of renewables and natural gas, energy demand growth and area energy interconnections plans. At the same time main barriers i.e. weaknesses and threats may be considered as Cyprus problem, energy generated conflicts and terrorism, energy sources environmental impacts, social contrariety and obstacles to energy plan change due to established economic growth.
V. CONCLUSIONS
Although Cyprus is an insular state with an isolated energy system dominated by oil fired generation, the island has a notable renewable energy potential and offshore natural gas reserves. In this framework the country energy strategic planning needs to be reconsidered in order to be more sustainable. Cyprus energy resources sustainability strengths and opportunities should be boosted and exploited and sustainability weaknesses and threats have to be eliminated and confronted.
In this direction the following suggestions for a country sustainable energy planning are formulated. Renewables, especially solar energy to be promoted more, waste to energy to be strongly considered, natural gas reserves exploitation to be further developed, pipelines and electricity cable interconnections with area countries to be prioritized and oil-fired generation dependence to be reduced. All these should be supported by a strong EU oriented political and legal framework and solid social consultation.
In the above process it must be noted that this paper results are limited, as the major energy demand sector i.e. transportation issues and the natural gas prices effect to reserves exploitation procedure has not been examined.
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