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Cyprus

Cyprus

Market Status: Cyprus gets first wind farm

CYRPUS: This year could see the figure for installed wind capacity in Cyprus nearly double as work begins on a number of wind farms. However, this will soon bump up against the 165MW limit the country has set for its attractive incentive system approved in 2009.

The support system allowed the country's first projects to move forward: in 2010, as the country's first wind farm came online, the figure zoomed from zero to 82MW.

The Orites wind farm, which was developed by local firm K Ellinas Energy and received financial backing from London- and Paris-based independent private equity firm Platina Partners, is made up of 41, 2MW machines from Danish manufacturer Vestas and became operational in September. "With Ellinas commissioning this first wind farm, it was a big step towards fulfilling targets," notes Sylvia Trabert, head of project management at Wincono Cyprus, a joint venture between local developer Ketonis and Germany's Wincono.

Wincono Cyprus itself will also bring its first wind farm online this year. Its 31.5MW Alexigros wind farm secured financing in December and is now being constructed. German turbine manufacturer Vensys is set to begin delivering the 21, 1.5MW direct-drive turbines for the project in April. Also set to come online in 2011 is a 20 MW project in Larnaca district being constructed by the Rokas subsidiary of Iberdrola Renovables. That will be composed of ten 2MW turbines from Spanish manufacturer Gamesa. And projects developed by Cypriot firms TP Aeolian Dynamics and Moglia Trading – both with 10.8MW projects using 1.8MW Vestas turbines – are also in the works.

Projects have progressed since the European Commission in 2009 gave the green light to an incentive scheme whereby wind producers are awarded €0.166/kWh for the first 1,750 hours of operation each year at full load. Above that volume, the payment reverts back to the electricity authority's standard purchase price, or about €0.10/kWh.

Market players saw the generous incentive price as necessary if wind farms were to be developed despite the island's moderate wind resources. The tariff is good for 20 years and is not adjusted for inflation. Since the tariff is good only for the island's first 165MW of capacity – equivalent to Cyprus's wind target for 2013 – developers are waiting to hear news on the tariff that will apply above this level.

Aside from its Alexigros project, Trabert of Wincono Cyprus says the group's Mari wind farm project – currently downsized to 6MW from an original 12MW – will also be eligible for the €0.166/kWh incentive price. "We have another 16.5MW project, the Kellia wind farm, which has obtained the building permit but for which grid connection is pending. It won't get into this 165MW round." There are no details on when the government might unveil proposed terms of the incentive scheme that will apply past 165MW but Trabert and other developers believe future incentive payments are likely to be less generous than current ones.

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