One year after the Competitive Electricity Market (CEM) began operating, hopes of cheaper electricity and a genuine choice of supplier for households remain unfulfilled. Bills are still high, alternative options for domestic consumers have not materialised in practice and competition is struggling to take on real substance. As consumers wait to see the benefits of the market opening, private producers and suppliers and the Electricity Authority of Cyprus (EAC) are trading accusations through Politis over who is responsible for the distortions and obstacles keeping the market far from its original goals.
Open only in theory
“The competitive electricity market is open only in theory. Suppliers cannot take on new customers because they are making losses. The cost of buying from EAC Generation is higher than the prices at which EAC Supply itself sells,” the President of the Electricity Market Association, Giorgos Chrysochos, told Politis.
“In essence, what EAC is doing is manipulating the market at the expense of consumers and participants,” he stressed.
Mr Chrysochos added that “there are problems in the market with metering data, there are long delays and the responsibility lies with EAC Distribution”. He also said that “there are delays in installing storage units (batteries), despite huge interest from private investors, because EAC is slow to issue connection terms”.
“We are not manipulating”
“EAC does not abuse, and has no intention whatsoever of abusing, its dominant position. EAC is regulated in advance and audited after the fact for every aspect of its participation in the Competitive Electricity Market. Regulation covers the approval of the wholesale tariff, allowed revenues, retail tariffs, fuel adjustments and the limits on participation in the competitive electricity market,” the Executive Director of Generation and Supply at EAC, Konstantinos Rouvas, told Politis.
“If we take into account that private suppliers set their prices as a percentage discount on EAC’s tariffs, it becomes clear that EAC must be able, and must be supported, to reduce its prices. This would directly benefit the majority of consumers served by EAC, but would also push private suppliers and producers to make corresponding reductions,” he stressed.
According to Mr Rouvas, under current conditions, the fastest way for EAC to lower prices is to significantly expand its renewable energy portfolio and to integrate a substantial amount of storage into its capacity.
“EAC’s few renewable energy sources enter its generation mix at an equivalent energy cost of around 5 cents. However, the quantity is so small that it essentially cannot have a positive effect on the price paid by the consumer,” he explained.
Final connection terms on the way
Responding to the Electricity Market Association’s complaint about delays in connection terms, the Assistant Network Manager (Studies and Connection Terms) at the Distribution System Operator, Marios Pappoutis, told Politis that following the approval of priority criteria by the Council of Ministers, on a proposal by the Minister of Energy, and the related regulatory decision to create a priority list, the Distribution System Operator (DSO) issued the first priority list for renewable energy and storage systems on 2 November 2026.
“Letters were sent to everyone in order of priority based on the list, and they were given until 16 November to reply on whether they accept the DSO’s proposal. After 16 November, the DSO will begin issuing final connection terms for renewable energy and storage systems.” According to Mr Pappoutis, the list will be updated on a monthly basis in line with the ministerial decree.
In Parliament
The problems and distortions arising from the CEM’s first year of operation were discussed on Tuesday at the House Energy Committee, after the issue was registered by AKEL MPs Andreas Pasiourtides, Giannakis Gavriel and Konstantinos Konstantinou.
Mr Pasiourtides argued that this first year has seen significant challenges and malfunctions affecting both the effectiveness of competition and the achievement of the intended goal. The challenges include the limited number of active participants, constraints on the electricity system, the need to strengthen energy storage infrastructure, curtailments of renewable energy generation and the persistence of high energy prices for households and businesses.
“The goal remains the development of real and effective competition, attracting new suppliers and ensuring that the benefits of market liberalisation translate into lower electricity prices for households and businesses,” he stressed.
“Until the market lowers prices for end consumers, we will be requesting, at regular intervals, scrutiny and accountability, and for all the key players in this new CEM system to report to us on what they are doing to achieve the main objective,” he noted.
“The CEM, as presented, should have operated in a way that allowed private companies, besides EAC, to offer households the opportunity to sign contracts with them too,” he added.
Limited visible progress
In a recent article in Politis, energy expert Charles Ellinas, senior fellow at the Atlantic Council’s Global Energy Center, pointed out that Cyprus’s Competitive Electricity Market is functioning from a technical point of view. “Electricity is traded through the day-ahead, intraday, forward and balancing markets, broadly in line with the EU Target Model,” he noted.
However, he stressed, “the measure of success for an electricity market is not whether its software works or whether bids are submitted on time. It is whether competition increases efficiency, encourages the right investments and passes lower costs on to consumers”.
Judged by these criteria, he noted, visible progress is limited. “Electricity prices remain among the highest in Europe. The low cost of solar generation is not being sufficiently reflected in lower bills. Consumers have very few meaningful choices, while the market is dominated by a small number of interconnected participants. This is not simply because the market needs more time. Its fundamental weaknesses are structural,” he underlined.
