Cyprus competitive electricity market marks one year of operation

On October 1, 2026, Cyprus’ competitive electricity market completes its first year of operation. The system, which transitioned to a new wholesale framework on October 1, 2025, utilizes the EU Target Model to manage electricity through day-ahead, intraday, forward, and balancing arrangements.

While the software and trading mechanisms are technically functional, critics note that electricity prices remain among the highest in Europe. Despite the introduction of the market, there has been limited progress in lowering consumer costs, as the low production cost of solar energy is not being fully passed on to the public. Experts highlight that the system faces structural weaknesses, exacerbated by the market's small, isolated nature and lack of cross-border interconnections, which are essential for effective competition under the EU framework.

The current evaluation focuses on understanding the underlying cost-formation mechanisms and identifying systemic inefficiencies. Moving forward, the effectiveness of the market remains a subject of intense debate, as stakeholders continue to assess whether structural reforms are needed to encourage actual competition and provide relief to consumers.