Many stakeholders in Cyprus' electricity sector have been discussing potential quick solutions to the high energy cost that exists in Cyprus. Referred to as "hot fixes" in recent statements from the Ministry, these ideas have captured attention. However, amidst the search for solutions, one remarkable approach has remained largely unnoticed. In this article, we delve into this hidden gem that has been right in front of us all along. Join us as we uncover a captivating strategy to reduce electricity costs in Cyprus, where a single day of the year holds the key to unlocking remarkable savings.
To understand the solution we have to understand the basic theory of how electricity systems are being sized. All utility companies need to be prepared to cover electricity demand at its peak, at the worst day of the year. This peak demand in Cyprus has reached 1239 MW on the 5th of August of 2021 (15:00) and the System operator in Cyprus had to be ready at any point to cover that amount of electricity no matter what. Failing to provide that peak demand results in most probably a complete failure of the system or blackouts. This peak demand of 1239MW is the key number for sizing the whole electricity sector of Cyprus, this means power lines, generators and many more things, all this infrastructure and millions of investments are based on one number.
Reducing the peak demand and helping people understand the importance of this number will allow us to reduce theoretically the cost of electricity significantly. Reducing the need to build an extra power plant that would cost hundreds of millions or delaying the need of such a power plant can reduce the cost electricity.
So how can we reduce peak demand effectively ?
There are 3 methods in reducing peak demand, effective energy efficiency, education and energy storage.
Effective energy efficiency
Everyone has heard of Energy Efficiency (EE), however traditional EE promotes the reduction of consumption in general and improvement in efficient use of energy. These methods have been effective in electricity demand reductions of the base load. This of course reduces peak demand also but its not the most effective way in reducing peak demand. If you add to the mix of energy efficiency the phycological aspect of the human nature and understand the root of the peak demand you can reduce it more effectively. What time is the peak occurring? The peak demand of 1239MW of 2021 occurred at 15:00 of the 5th of August. It was a Thursday during a heatwave a week before vacation, everyone is rushing to finish up and close everything for the summer, everyone has the A/C at high at 20°C.
To tackle this, a targeted energy efficiency approach can be adopted. This strategy involves understanding the specific times and conditions that lead to peak demand and implementing measures to reduce consumption during these periods. For instance, demand response programs, as studied by Somayeh Siahchehre Kholerdi and Ali Ghasemi-Marzbali , can be effective in industries like cement plants, where they have been shown to significantly improve the energy efficiency index.
Moreover, the use of machine learning techniques to predict abnormal consumption behavior, as proposed by Rawan ELhadad and her team, can also be beneficial. By forecasting these anomalies, it's possible to take proactive measures to manage and reduce peak demand.
Another innovative approach is the application of behavioral economics to promote efficient use of electricity, as discussed by Prima Gandhi and Aceng Hidayat. By making the public aware of their electricity consumption compared to nearby households, it encourages more mindful use of energy, potentially reducing peak demand.
In conclusion, targeted energy efficiency is not just about reducing energy consumption in general, but it's about understanding when and why peak demand occurs and taking specific actions to mitigate it. By combining technological advancements, innovative strategies, and a deeper understanding of consumption behavior, we can more effectively reduce peak demand and move towards a more sustainable future.
Education about energy consumption can significantly enhance the effectiveness of energy efficiency measures. There's a common misconception in the energy industry that consumers are unable to comprehend complex electricity tariffs and the pricing of electricity. However, this is not the case. With the wealth of information available online, individuals are increasingly willing to research and understand their electricity bills, including why they might be high and how many kilowatt-hours (kWh) are required to power their air conditioning (A/C) units.
By helping consumers understand these aspects, they can make more informed decisions and become aware of the consequences of their actions. For instance, setting the A/C to high speed at 18 °C can impact the electricity grid. If everyone does this, the Electricity Authority of Cyprus (EAC) may need to activate its least efficient and oldest generating units, which have a significantly higher electricity cost than other units.
At this point, one might wonder if the activation of these high-cost units leads to higher electricity prices for consumers. The answer is both yes and no. While the price of electricity for residential customers remains constant and only changes based on oil prices, these higher costs are already factored into the electricity price. In other words, the EAC anticipates that we will set our A/C to 18 °C and will need a certain amount of energy, so they charge everyone for that unit, even if we might not use it. This means that our actions can indirectly affect the overall cost of electricity.
There are a lot of use cases for energy storage in general such us frequency response and energy arbitrage in this subject energy storage can act as capacity unit or Peaker plant and reduce effectively the extreme high peaks that occur during the summer of Cyprus and reduce and replace the need for the old and inefficient generating units that exist currently in grid. Energy storage can do this peak reduction and still do it without any emissions. Peak reduction and the replacement of peaker plants has been done in many countries you can read our other article .
In closing, the journey towards a sustainable and cost-effective energy future in Cyprus is not a distant dream, but a tangible reality within our grasp. By harnessing the power of targeted energy efficiency, empowering consumers through education, and leveraging the potential of energy storage, we can transform the energy landscape. It's a compelling strategy that's been hiding in plain sight, ready to revolutionize the way we consume and understand energy. This is more than just a solution; it's a paradigm shift towards a more sustainable and economically efficient energy sector.
By Sotiris Kyprianou
Sotiris is an energy analyst that dedicated his career to the energy sector with degrees in engineering and management in the sector with specialization in renewable energies, energy storage, and energy modeling.
(1) Asadi, M., Larki, I., Forootan, M. M., Ahmadi, R., & Farajollahi, M. (2023). Long-Term Scenario Analysis of Electricity Supply and Demand in Iran: Time Series Analysis, Renewable Electricity Development, Energy Efficiency and Conservation. Link
(2) ELhadad, R., Tan, Y.-F., & Tan, W. (2022). Anomaly Prediction in Electricity Consumption Using a Combination of Machine Learning Techniques. Link
(3) Siahchehre Kholerdi, S., & Ghasemi-Marzbali, A. (2022). Effect of Demand Response Programs on Industrial Specific Energy Consumption: Study at Three Cement Plants. Link
(4) Gandhi, P., & Hidayat, A. (2022). Electricity saving receipt as electricity consumption efficiency innovation using behavioral economic science approach. Link