The long-awaited reduction in electricity prices remains “invisible” for the majority of consumers, with only around 10% of the market, mainly industrial and commercial users, already benefiting from lower tariffs.

The president of the Electricity Market Association, Giorgos Chrysochoos, and members of the board said during a presentation to the media that a widespread reduction in electricity prices will become a reality only when new players enter the market, new generation units are created, and energy storage systems become operational, a process expected to take about one and a half to two years. “The reduction in energy costs will be passed on to consumers once market conditions allow it,” Chrysochoos noted.

At the same time, the anticipated entry of Cyta into the electricity market was described as welcome, provided that it does not create a dual dominance alongside the Electricity Authority of Cyprus. The association’s president said the new entry could strengthen competition and offer consumers more attractive options, while warning that Cyta’s strong presence may also put pressure on other suppliers.

The key point, according to the association, is that lower electricity prices for everyone will require time, investment, and healthy competition, with the final consumer bill likely to be significantly influenced by the entry of new market players and the development of energy storage infrastructure.

In a revealing presentation on the state of the domestic electricity market, the Electricity Market Association outlined a landscape full of problems but also missed opportunities. According to the analysis, the market remains largely concentrated, with EAC Generation controlling 72.6% of total electricity production.

In contrast, private renewable energy producers participating in the competitive electricity market account for only 6.4%, despite having an installed capacity of 324 MW. In addition, while 26% of energy in Cyprus comes from renewable sources, the vast majority, around 21%, is traded commercially through the Electricity Authority of Cyprus, mainly via feed-in tariff and net-billing contracts.

It was also emphasized that technical failures in the systems supporting the competitive electricity market appear to contribute significantly to the phenomenon of inflated electricity bills. The MMS and MDMS systems show delays in settlements and inaccurate measurement data, while incorrect imbalance charges dramatically increase costs for suppliers. At the same time, the Mandatory Unit Commitment Mechanism requires revision, as it concerns approximately half of the energy supplied by electricity providers.

Another “missed opportunity” was identified in the management of renewable energy projects by the Electricity Authority of Cyprus itself. According to the association, over the past twelve years permits were granted for twenty-eight renewable energy projects with a total capacity of 171.9 MW, yet today only five projects are operating, with a combined capacity of just 23 MW.

The association presented a plan for the immediate reduction of electricity costs, based on five key pillars:

Natural gas: Its introduction could reduce prices by up to 30%, as it is about 25% cheaper than diesel while also cutting emissions by 40%.

Energy storage: There is strong interest from the private sector for centralized storage systems and solar installations with storage, which could reduce renewable energy curtailments expected to reach 50% by 2025.

Network independence: The full legal separation of transmission and distribution networks would ensure impartial operation, in line with European directives.

Smart meters: Accelerating their installation is critical for dynamic pricing and for strengthening consumers’ ability to choose their electricity supplier.

Healthy competition: The goal is a transparent market in which suppliers compete with different packages and producers participate based on their real production costs.

Source: Brief