The Electricity Market Association on Tuesday presented five proposals aimed at reducing electricity prices in Cyprus, while criticising what it described as inertia, interventions and distortions in the Competitive Electricity Market.
Speaking at a working breakfast presentation, the association’s president Giorgos Chrysochoos said that lower electricity prices require the smooth and effective operation of the competitive market without distortions or interference.
He outlined five key measures: improving the functioning of the competitive electricity market, reducing curtailments of renewable energy sources (RES), accelerating the development of energy storage systems, introducing natural gas and modernising and legally separating electricity networks in line with European legislation.
Natural gas could lower prices
Chrysochoos said the arrival of natural gas in Cyprus could reduce electricity prices by around 30 percent.
He explained that conventional power generation would become 7 to 8 percent more efficient if natural gas were used as fuel.
Responding to questions about whether the launch of the competitive electricity market had already led to price reductions, he said that prices had fallen but not to the extent initially expected.
“The reduction in electricity prices cannot be expected solely from the operation of the competitive market,” he told Politis, stressing the need to accelerate energy storage projects and reduce renewable curtailments.
Concerns over market distortions
Chrysochoos also pointed to gaps in the functioning of the electricity market, particularly regarding the lack of transparency over how the costs of system inertia are allocated.
System inertia refers to conventional power generation units that must remain in operation for grid stability and security reasons.
According to the association, the current system places a disproportionate burden on independent electricity suppliers.
Pricing advantage for EAC
Chrysochoos argued that the Electricity Authority of Cyprus (EAC) benefits from the current pricing structure of renewable energy, which allows electricity generated from RES to be purchased at 11 cents per kilowatt-hour.
As a result, he said, the retail price offered by EAC can be lower than wholesale prices in the market.
“Independent suppliers are forced to buy most of their electricity at EAC wholesale prices and therefore cannot compete with EAC in the retail market,” he said.
He also noted that EAC remains the largest renewable energy producer in Cyprus.
Private renewable producers participating in the competitive electricity market account for only 6.4 percent of electricity generation, with a total installed capacity of 324 megawatts, while 72.6 percent of production still comes from EAC generation.
According to Chrysochoos, EAC Supply can purchase electricity from renewable technologies with a total installed capacity of 416 MW at the regulated price of 11 cents per kilowatt-hour.
Cyta’s entry into the energy market
Commenting on the potential entry of Cyta into the electricity sector, Chrysochoos said that any new market player is welcome.
However, he noted that Cyta’s dominant position in the telecommunications market raises questions regarding fair competition.
“For this reason it should be regulated under the same framework as EAC as a state monopoly,” he said.
Renewables share in electricity production
According to data presented by the association, EAC has been granted licences for 28 renewable energy projects with a combined capacity of 171.9 MW over the past twelve years.
Of these, only five projects with a total capacity of 23 MW are currently operational.
Data from the Renewable Energy Authority of Cyprus (PAEK) shows that by August 2025 approximately 26 percent of Cyprus’ electricity production came from renewable energy sources.
Of this share, around 21 percent was traded commercially through EAC under feed-in-tariff and net-billing contracts.