The tender was initiated by the Energy Service of the Ministry and implemented on January 30 by the Treasury. Overall, the Ministry selected 23 projects of various sizes totaling 50 MW. Once completed, the projects are expected to generate around 80 GWh of energy annually.
The tender drew a lot of interest from both Cypriot and foreign companies. Specifically, there were four different tenders for the different project sizes auctioned, which attracted 121 investors and 2,150 bids. Competition among the high number of participants, in combination with the last year’s overall fall in photovoltaic components’ prices, led to an average tender price of €0.0866/kWh.
As such, the Electricity Authority of Cyprus (EAC), which purchases all power from renewable energy sources, will be able to buy the generated power from the 23 projects at prices much lower than the €0.1540/kWh it currently pays to produce electricity. The Cypriot Ministry anticipates this will save 43.76%, or €5.8 million per year.
The tender prices are also significantly lower than the subsidy tariffs published by the Cypriot energy regulator at the last round of licenses for small to medium photovoltaic parks issued in December.
The following photovoltaic projects have been selected via the tender:
- 15 projects up to 1.5 MW each in size have been chosen. The final average price secured at the tender was €0.0970/kWh. EAC, the Ministry says, will save €1.9 million per year.
- 5 projects between 1.5 and 3 MW were selected. The final average price secured was €0.0842/kWh. EAC is expected to save €1.6 million per year.
- 2 projects between 3 and 5 MW were selected. The final average price secured was €0.0833/kWh. In this case, EAC will save €1 million per year.
- 1 project worth 10 MW was approved, with a final average price of €0.0741/kWh. EAC is anticipated to save €1.3 million per year.
Selected projects now have to secure financing in order to prove the viability to the Energy Conservation Fund and later to the Energy Regulatory Authority.
Low auction prices
Due to the very per kWh low purchase prices secured at the auction, the Cypriot Renewable Energy Sources Fund is set to benefit financially, which will potentially lead to further photovoltaic projects.
Originally, the Fund, which earns money through the utilities’ energy bills, was set up by the Cypriot authorities to support renewable energy projects. Since the price EAC will buy the photovoltaic power from the tendered projects will be less than the average electricity price, the Minister of Commerce, Neoklis Silikiotis has said the difference will be offered to the fund. This, Silikiotis added, is very important since “it creates conditions for the fund to become viable.”
As of 2012, Cyprus had an installed photovoltaic capacity of around 16 MW, mainly distributed across a number of small systems. The country’s goal is to reach a total 192 MW by 2020. The tender results, coupled with the University of Cyprus recently approved 10 MW project are, thus, significant steps towards that goal.