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Cyprus

Cyprus

Turbines from Czech Republic for island's first two projects

Some of the first German Vensys Energiesysteme 1.5 MW machines to come off the company's new production line at engineering firm CKD in Prague are to be delivered to the first two wind projects on Cyprus -- the 12 MW Mari and the 34.5 MW Alexigros wind farms, both near Larnaca in the south of the island. "The first machines are now being built and some of the first ten will certainly go to Cyprus, probably before the end of the year, depending on when all permitting and financing is completed," says the company's Jürgen Millhoff. Wincono Cyprus, developer of the projects, has applied for them to be registered in Germany for Clean Development Mechanism (CDM) status under the Kyoto Protocol rules. As such, their CO2 emission credits can be sold to Germany to augment the income from power sales. A decision is expected soon. If they qualify for CDM status, the Mari wind farm could be installed this year, while Alexigros is due for commissioning in October 2007. Achieving CDM status will make the projects viable, says Wincono, pushing up the internal rate of return (IRR) by some 2% for Mari and 2.65% for Alexigros. The emission reduction credits are expected to be priced at around EUR 14-15 per tonne of carbon dioxide emissions saved. Mari is forecast to save 16,313 tonnes of CO2 a year while 58,427 tonnes of CO2 will be saved annually by Alexigros. The IRR increase "would be sufficient to make the proposed projects a reasonably attractive proposition for investors even considering the risks related to the project." These risks include the first commercial use of the Vensys turbine, which does not have a gearbox, and the fact that these are the first wind projects on Cyprus, not an island known for its good wind resource.

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