The Electricity Market Association (EMA) has submitted a series of recommendations concentrated into five pillars, aiming to reduce the price of electricity and ensure the smooth and efficient operation of the competitive electricity market, the reduction of cuts in renewable energy sources (RES), the development of energy storage systems, the advent of natural gas, and the independence and modernisation of networks.
Speaking during a presentation of the recommendations, the President of the Electricity Market Association, George Chrysochos, gave assurances that the Association is operating aas an umbrella for the entire electricity market with a common goal of providing consumers with cheap electricity. At the same time, he referred to the distortions and problems that marked the start of the Competitive Electricity Market (CEM), such as system failures, incorrect and inaccurate metering data, a delay in sending Market Management System (MMS) settlements, incorrect data in the October settlement, high settlement fees, and high costs for suppliers.
Accoridng to the EMA, for the CEM to function properly, transparency and healthy competition in the electricity market are required, along with the existence of competition between suppliers with different packages and prices, the participation of producers based on the actual cost of production, active consumers with the ability to choose a supplier, and a stable regulatory framework with reliable market data.
Low RES penetration and the EAC as a key player
Analysing the current distribution of production in the electricity market, the President of EMA explained that the Electricity Authority of Cyprus (EAC) has received licensing for 28 RES projects with a total capacity of 171.9MW in the last twelve years, of which five are operating with a total capacity of 23MW.
Based on Cyprus Energy Regulatory Authority (CERA) data, by August 2025, approximately 26% of Cyprus' electricity came from RES, of which 21% was traded commercially through the EAC, through feed-in-tariff and net-billing contracts.
It is noted that private RES participating in the competitive electricity market have a share of only 6.4% and a total installed capacity of 324MW, meaning that participation is decreasing rather than increasing, which stands at approximately 9%.
"The largest percentage of energy produced amounts to 72.6% and comes from EAC Generation. EAC Supply has the option to purchase from RES technologies with a total installed capacity of 416MW at the final price of 11 cents per kilowatt-hour following a regulatory decision," Chrysochos said, explaining that EAC is becoming the main player in the RES market.
Suggestions for reducing the price of electricity
The smooth and efficient functioning of the competitive electricity market is a basic prerequisite, according to EMA, for achieving a reduction in electricity costs.
In this context, as the President of the Association pointed out, transparency and healthy competition are required in the electricity market, along with effective competition between suppliers with different packages and prices, the participation of producers based on the actual cost of production, the existence of active consumers with the ability to choose a supplier, and the stability of the regulatory framework with reliable market data.
The arrival of natural gas, which can reduce pollutants by 40%, is also considered a must. "Today, the cost of TTF is 31 Eur/MWth, which is 25% cheaper than diesel. The arrival of natural gas can reduce prices by up to 30% under normal market conditions, while with natural gas, conventional production will be 7%-8% more productive," explained George Chrysochos, emphasising the need to create infrastructure for the transportation of natural gas.
As for the necessary creation of an energy storage system, it is scheduled to take place within the next two years. With cuts of 50% for 2025, the creation of such a system will contribute to the further penetration of RES and the reduction of energy costs.
There is great interest from the private sector in central storage systems of 1018MW/3,127MWh and photovoltaic systems with energy storage of 1087MW/2,900MWh.
Another key pillar for reducing electricity costs is the independence and modernisation of networks, as in free electricity markets, networks are entitled to and operate fully independently and impartially.
EMA proposes, among other things, the independent and impartial operation of networks in free electricity markets, the legal unbundling of networks in accordance with the European directive such as with the Cyprus Transmission System Operator (CTSO), the modernisation and strengthening of transmission and distribution networks for greater penetration of RES, as well as the acceleration of the installation of smart meters for provider selection and dynamic pricing.
The timetable
Asked about the long-awaited reduction in the price of electricity and why this has not been felt by consumers, the EMA President pointed out the need to create more units, referring to the obstacles that arise for suppliers in providing cheap energy.
"10% of the market enjoys reduced prices, including industries and commercial consumers. We need to look at the average. The entry of new conventional players and the creation of new units, as well as energy storage systems, the operation of which is expected in 1.5-2 years, create the conditions for cheaper energy, the reduction in the cost of which will be passed on to consumers," he stressed.
Concerns over Cyta's entry into the energy market
The Electricity Market Association considers Cyta's entry into the electricity market to be welcome, but subject to conditions, expressing concerns about the possible creation of a duopoly (EAC - Cyta) in the electricity market.
As stated by EMA President Giorgos Chrysochos, new players in the energy market are considered welcome in order to ensure healthy competition, something which will contribute to reducing the price of electricity for the benefit of consumers.
However, as he said, "Cyta, as a dynamic brand in the consumer consciousness and as a dominant organisation in the telecommunications market, will have easier access to consumers, potentially creating attractive overall packages that will put other providers at a disadvantage."
(Source: InBusinessNews)
