The Cyprus power system and market changes

Background and context

The EU islands have great potential to benefit from the clean energy transition and become forerunners in implementing energy and climate change policies. 

The EC's ​Structural Reform Support Service (SRSS) coordinates and provides technical support to EU countries, including Cyprus, in cooperation with the relevant Commission services. The objective is to help build more effective institutions, governance frameworks and administrations. Also, as part of the Clean Energy Package, the EU's Clean Energy for EU Islands initiative provides a long term framework to help islands generate their own sustainable, low-cost energy.

The Cyprus power system has the typical characteristics of isolated Mediterranean island grids: largely unexploited renewable energy potentials, heavy dependence on liquid fossil fuel imports, limited capability (i.e. low system inertia) to react to contingencies and events, high daily and seasonal demand fluctuation, no grid connection (yet) to neighbour countries.

The present generation fleet in Cyprus includes steam, combined cycle gas turbine, internal combustion compression ignition engines and gas turbine units, which are located in three sites (Vasilikos, Dhekelia and Moni). Operational constraints are set on some generators for complying with emissions limits. In general, the conventional generators have not been designed for a very flexible operation that might be required in the future.

Cyprus is also characterized by an abundant solar energy resource across the whole year: the average global solar can reache 2000 kWh/m2. Wind energy is instead quite limited over the island of Cyprus, with an annual average wind speed below 4 m/s in the majority of areas. 

Our role

Against this background, we support, along with SRSS and ​DG ENER, the Cyprus government to establish a comprehensive medium- to long-term policy (2030 time horizon) for the optimum penetration of renewable energy in the electricity system. The following two consecutive projects were agreed upon and are being carried out: 

  • The first project, concluded in 2016, aimed at assessing the current state of the transmission and distribution electricity systems and proposing solutions for increasing the Renewable Energy Sources penetration in the electricity system. It was split in four interlinked activities, spanning from system characterisation, to transmission/distribution simulation up to Unit Commitment and Economic Dispatch (UCED) analyses, with a view to perform an integrated assessment of the Cyprus electricity system (power infrastructure and markets).
  • The second project, started at the end of 2017 and currently running, aims to complement the system analyses performed in the first project and perform deeper evaluations on the power distribution system performances and regulations.

2017 - JRC-ETIP SNET South Eastern Region Smart Grids Workshop

This workshop (agenda here) was co-organised by the JRC and ETIP SNET (European Technology & Innovation Platform for Smart Networks for Energy Transition) in Nicosia (Cyprus).The workshop was held in order to: discuss the priorities related to Smart Grids set out in the European Commission's proposal for a new electricity market design, exchange about the role of the Smart Specialisation Platform on Energy (S3PEnergy) and know more about regional innovation policy activities; learn about South-Eastern Region’s national Research & Innovation projects, exchange experiences, recommendations and best practices, discuss the deployment perspectives as well as the remaining challenges and barriers; contribute to the prioritization of Smart Grids related R&I topics. A specific session was dedicated to challenges faced by the EU islands.

In this context, we presented the results, the opportunities and lessons learned stemming from our first support project to the Cyprus government. The main contributions of the project were: the development of a detailed Unit Commitment and Economic Dispatch Model for Cyprus; the development of an evaluated Transmission System dynamic model incorporating all new technologies for Cyprus; the soft-linking of the two models for power system planning; the examination of possible barriers in the distribution system. Also, the following opportunities were identified: better utilisation of assets (conventional units); initiatives for enhanced observability of transmission and distribution system (PMUs, PV production), the introduction of battery storage with enhanced frequency response to solve local criticalities caused by small PVs. Eventually, we learned the following lessons: in small isolated systems, the Unit Commitment and Economic Dispatch has to incorporate in detail balancing reserves and inertial response; under high RES penetrations long-term energy planning has to take into account dynamic security constraints.

2016 - Support to renewable energy integration in Cyprus

This report describes the main results of the first project we carried out to support the Cyprus government. Some of the main conclusions and recommendations are listed below (more details are available in the report).

Storage units are key components to provide more flexibility in the system. Storage units are foreseen for providing both energy shifting and fast frequency response. If not enough flexibility can be obtained from the generation and the demand side, storage technology deployment is unavoidable to integrate high shares of RES. Depending on the type of flexibility needs, different storage technologies can be used with significant differences in terms of cycling losses, investment costs, power to energy ratio and reaction speed to frequency events.

System security is met under the loss of largest infeed under specific operational conditions and the assumption that Battery storage with Enhanced Frequency Response is used. Under Frequency Load Shedding scheme is expected only under Exceptional Contingencies. In the future, the most critical contingencies in the transmission system may become grave 3-phase faults, especially if small PV installations continue to trip at voltages lower than 80% of nominal.

Flexibility capabilities of the existing generation fleet could be increased in terms of ramping, minimum time off and on, start procedure, response speed of controller. However, the economic impact for the power plant operator needs to be better assessed. Increasing significantly the flexibility could increase variable operational costs and/or reduce efficiency.

Optimal management strategies for distributed resources might be different for the DSOs and the TSO. Solving problems locally (e.g. voltage quality in MV grid) and globally at system level might be conflicting. Possible conflicting interests were identified for demand response strategies and the weakening of Under Frequency Load Shedding. Smart grid deployment may offer the required tools for a more integrated approach taking into account both interests of the transmission and distribution systems.

If distributed generation is to become a significant part of the generation capacity, systematic verification of its behaviour under normal and abnormal conditions must be undertaken (e.g. for Low Voltage Fault Ride Through, curtailment). Smart grid deployment could improve the observability and controllability of the small units in the distribution system. However, it is recommended to analyze the costs and benefits for this option.

Demand response is potentially a very economic way to increase the system flexibility. Therefore, its full potential needs to be carefully investigated. Especially the following demand sectors should be analysed: drinking water production and distribution, water pumping for irrigation, hotel sector, prosumer households (for increasing self-generation).

Modelling effort should be continued and enhanced. Conventional unit models should be validated by tests which should include both governors and Automatic Voltage Regulators. Manufacturer specific information of the actual excitation systems, speed/power controllers and prime movers for the steam and gas turbines should be obtained. Accurate measurements for the dynamic response of the main components of the power system. This is absolutely needed to validate the dynamic model. Dynamic response of the different load categories also needs to be researched. 

Detailed investigation of techno-economic parameters for the flexible operation of combined cycle gas turbine (CCGT) units. With a high share of solar energy concentrated during the daytime, the modelling results indicate that the system would benefit from a more flexible operation of the CCGT units. Operating in the future CCGT units as flexible base load has technical limits and also economic impacts.

Methodologies should be examined for incorporating short-term (intra-day) forecasting of distributed generation and demand into the secure operation of the Cypriot power system in respect to requirements such as reserve allocation, congestion management etc.

Higher operational flexibility has the potential to reduce RES curtailment and reduce the fuel consumption, which would consequently reduce emissions. Instead of defining emissions targets for each of the conventional generators, it is suggested to define in the simulations only a global target for the whole generation fleet.

In future scenarios, as RES curtailment turns out to always be cheaper than activation of load shedding to keep the system stable, it is crucial to define with clear rules which economic compensations are available or not for the RES plant investor.


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