Cyprus’ First Year of Competitive Electricity Market Shows Limited Impact

Cyprus completed the first year of its competitive electricity market on October 1, operating day‑ahead, intraday, forward and balancing mechanisms in line with the EU Target Model. However, the market has not delivered the expected gains in efficiency, investment or consumer savings. Prices remain among Europe’s highest, and the low cost of solar power is not reflected in lower bills. The system is dominated by a few interconnected participants, with most photovoltaic capacity operating under self‑consumption schemes and high curtailment rates. Structural weaknesses—no interconnection, a single dominant conventional generator, limited transparency and a lack of flexibility infrastructure—prevent meaningful competition. Proposed reforms such as LNG, storage and the Great Sea Interconnector face delays, high costs and uncertain benefits, leaving Cyprus’s electricity market in a fragile state.