Cyprus

1) REFERENCES

Commission Opinion [COM(93) 313 final - Not published in the Official Journal]Commission Report [COM(98) 710 final - Not published in the Official Journal]Commission Report [COM(1999) 502 final - Not published in the Official Journal]Commission Report [COM(2000) 702 final - Not published in the Official Journal]Commission Report [COM(2001) 700 final - SEC(2001) 1745 - Not published in the Official Journal]Commission Report [COM(2002) 700 final - SEC(2002) 1401 - Not published in the Official Journal]Commission Report [COM(2003) 675 final - SEC(2003) 1202 - Not published in the Official Journal]Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

In its July 1993 Opinion the Commission considered that in the event of accession the energy situation in Cyprus would have no great effect on that of the European Community or on the development of its energy policy. Nevertheless Cyprus would have to adapt its legislation or introduce new laws to satisfy Community requirements in the field of energy.

The November 1998 Report concluded that the majority of the acquis still needed to be transposed but that Cyprus had institutional structures and capacities to implement it.

In 1999 the Commission noted that Cyprus needed to align itself further on the Community acquis in such areas as the internal market, energy efficiency and emergency preparedness.

In the November 2000 Report, the Commission noted that progress in these areas had been limited, but that studies assessing the energy sector had been undertaken. These studies, primarily covering security of the energy supply and the liberalisation of the energy sector, were then reaching completion. The results of these studies would assist in the development of a national energy strategy as well as in the transposition of important areas of the energy acquis as yet to be transposed. Cyprus had, however, made progress in terms of energy efficiency.

In the November 2001 Report, the Commission noted that Cyprus had made some progress in the energy sector although a number of measures still needed to be adopted. In the fields of security of supply, competitiveness and the internal energy market, no legislative development could be reported. The report recommended a number of additional measures. Cyprus needed, for instance, to build up its oil stocks and storage capacity and rectify the monopoly position of the Electricity Authority. Cyprus had continued to make progress on energy efficiency. Legislation on the labelling of household appliances was adopted in June 2001. However, further measures were still needed.

The October 2002 Report noted that Cyprus's efforts now needed to focus on adopting outstanding legislation and ensuring its full and timely application, in particular with regard to the internal energy market (electricity). Concerning oil stocks, Cyprus needed to make arrangements to ensure the finance to build up oil stocks.

The 2003 Report stressed that Cyprus was essentially meeting the commitments and satisfying most of the requirements arising from the accession negotiations on energy efficiency and renewables and nuclear energy and safety, and should be in a position to implement the acquis in these areas upon accession. It must complete alignment of its legislation, in particular with the most recent acquis in the field of energy efficiency.

COMMUNITY ACQUIS

The key elements of the energy acquis consist of Treaty provisions and secondary legislation relating more specifically to competition and State aid, the internal energy market (including directives on electricity, price transparency, gas and electricity transit, hydrocarbons, licensing, emergency preparedness and, in particular, security stock obligations), nuclear energy, energy efficiency and environmental rules.

The Community acquis in the field of nuclear energy today comprises a framework of legal and political instruments, including international agreements. It currently addresses issues of health and safety (including radiation protection), safety of nuclear installations, management of radioactive waste, investment, promotion of research, creation of a nuclear common market, supplies, safeguards and international relations.

EVALUATION

Overall, the adoption of the acquis is satisfactory but further sustained efforts are required, especially in terms of security of supply and, in particular, oil stocks.

In the field of competitiveness and the internal energy market, the Electricity Authority, a governmental organisation, still has a monopoly on electricity generation and distribution. This monopoly position will need to be altered in order to comply with the acquis. The law on the transparency of gas and electricity prices for the industrial end user was approved by the House of Representatives in 2001. There is an urgent need for Cyprus to complete alignment of its legislation with the electricity Directive by adopting the implementing provisions.

Greater consideration should be given to administrative structures because, although Cyprus has proper institutional systems, no regulatory mechanism as required by the internal energy market acquis has as yet been established.

As regards energy production, Cyprus is continuing to examine the possibilities for the future development of a gas sector. At present there is no consumption of natural gas. It must also ensure that its legislation is aligned with the gas Directive. Cyprus does not have any coal mines. Consequently, the solid fuel sector is of relatively little significance, although a new oil fired power plant is under construction which may also be converted for coal. Cyprus still has no plans for any on-shore/off-shore oil exploration. Furthermore, the country does not produce any nuclear energy and has no plans to do so. Nonetheless, Cyprus is concerned by other aspects of nuclear safety applicable to radioactive materials from sources other than power generation. In June 2001, the Council of the European Union took note of a Report on Nuclear Safety in the Context of Enlargement, which contains recommendations on nuclear issues of relevance to Cyprus, particularly regarding the management and disposal of institutional radioactive waste, i.e. mainly sealed sources from industrial and medical applications. Due attention should also be given to preparing the implementation of Euratom safeguards. Cyprus is a member of the International Atomic Energy Agency and has concluded a full-scope safeguards agreement with the IAEA as well as an additional protocol.

In terms of energy efficiency and renewable energy sources, an action plan submitted to the Council of Ministers provides, inter alia, for incentives for the promotion of photovoltaic, wind, solar, thermal, biogas and other energy resources.

Last updated: 13.01.2004