Nicosia: The commercial operation of the Competitive Electricity Market in Cyprus is set to commence on October 1st, following the finalization of agreements by 17 market participants on September 26 and 27. These participants have signed on to the contractual framework of the electricity market rules, marking the last preparatory step before the market’s launch.
According to Cyprus News Agency, Constantinos Varnavas, the Electricity Market Manager of the Transmission System Operator Cyprus (TSO), stated that the initial phase includes 17 participants. Among these, there are two producers, one of which operates a “virtual unit” with a capacity of less than 5 MW, ten suppliers, nine Renewable Energy Sources (RES) Cumulative Representation Bodies, and three RES producers. The Electricity Authority Cyprus (EAC) Generation and EAC Supply are part of this competitive market, with special regulations due to their dominant market position.
The first commercial transactions within the Competitive Electricity Market will occur on October 1st, following a trial operation period that began on January 7th, 2025, which did not involve financial transactions. Most participants are already active in the transitional electricity market regulation that has been in place since 2021, accounting for about 10% of total production and consumption.
The framework allows producers to sell and suppliers to buy energy, with fees paid for necessary services and public utilities. Consumers and self-producers engage indirectly through suppliers, acting as active customers or energy community members. Participants, once licensed by the Cyprus Energy Regulatory Authority (CERA), take on roles such as producers, RES bodies, or suppliers to engage in energy trade and resale.
Varnavas highlighted that immediate consumer benefits might not be visible upon market opening. However, the market is crucial for future actions that will ultimately benefit consumers. Suppliers will be able to adjust pricing based on wholesale market signals and consumption meters, offering various pricing options like fixed, fuel-adjusted, and dynamic pricing tied to wholesale market prices.
The competitive environment will provide consumers with more choices in selecting suppliers and pricing models that fit their needs. With advanced consumption meters like smart meters, pricing can directly reflect competitive market prices, enabling consumers to alter energy use patterns to capitalize on lower prices.
Consumers with personal energy production, either individually or through energy communities, can also participate in the market. This consumer empowerment aligns with the European Union’s energy model, which Cyprus is adopting. Investors, by leveraging price differentiation, can make strategic investments such as energy storage, purchasing energy during high production from renewables, and selling during peak demand periods.