Energy Policy in Cyprus: Outlook and Major Challenges
Journal
Cyprus Economic Policy Review
Date Issued
2007
Author(s)
Abstract
This paper outlines major energy policy challenges that Cyprus is faced with.
Main issues are securing the island’s energy supply and limiting growth in
greenhouse gas emissions. Results from econometric analyses show that energy
use is income elastic and price inelastic, which indicates that energy consumption
may continue to grow rapidly in the future in the absence of appropriate price
signals and energy conservation measures. Based on these results, the paper
argues that policymakers need to focus on three major topics: improving energy
efficiency in buildings, controlling the growth of energy use in transport, and
diversifying the power generation mix. Current progress is mixed: Although
energy efficiency subsidies are useful, official estimates of energy savings
achieved are optimistic, and a careful assessment is necessary. In transport, the
introduction of reliable public transportation systems is an urgent priority. Plans
to diversify the mix of power generation are well under way regarding the
introduction of natural gas, but there are delays in the introduction of renewable
sources, which also limit the degree of energy market liberalisation.
Main issues are securing the island’s energy supply and limiting growth in
greenhouse gas emissions. Results from econometric analyses show that energy
use is income elastic and price inelastic, which indicates that energy consumption
may continue to grow rapidly in the future in the absence of appropriate price
signals and energy conservation measures. Based on these results, the paper
argues that policymakers need to focus on three major topics: improving energy
efficiency in buildings, controlling the growth of energy use in transport, and
diversifying the power generation mix. Current progress is mixed: Although
energy efficiency subsidies are useful, official estimates of energy savings
achieved are optimistic, and a careful assessment is necessary. In transport, the
introduction of reliable public transportation systems is an urgent priority. Plans
to diversify the mix of power generation are well under way regarding the
introduction of natural gas, but there are delays in the introduction of renewable
sources, which also limit the degree of energy market liberalisation.
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