Overview Of A Competitive Market Transformation

The Cyprus Electricity Market Association (ΣΑΗ) recently held a press briefing presenting an overview of developments in the country’s energy sector. The discussion focused on the operation of the Competitive Electricity Market, the increasing role of renewable energy sources and the performance of the Public Power Corporation (ΑΗΚ). Participants reviewed current market dynamics and highlighted several structural challenges affecting electricity prices and the pace of the energy transition.

Five Key Strategies To Lower Electricity Costs

Under the leadership of President George Chrysokho, the association presented five proposals aimed at reducing electricity costs for households and businesses. These recommendations include improving the functioning of the competitive electricity market, removing regulatory restrictions that slow renewable energy projects, expanding energy storage infrastructure, modernizing distribution networks under more independent management and integrating natural gas into Cyprus’s energy mix. According to the association, these measures could improve market efficiency and create conditions for lower electricity prices over time.

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Embracing Natural Gas For Enhanced Efficiency

A central topic of the discussion was the potential role of natural gas in electricity generation. According to the association’s estimates, the use of natural gas could reduce emissions by around 40% while lowering electricity production costs by roughly 30%. Current market conditions support this argument. The TTF benchmark price is approximately 31 Eur/MWth, making natural gas about 25% cheaper than diesel. Electricity generation using natural gas is also estimated to be 7-8% more efficient than production based on heavy fuel oil, which currently remains a primary fuel source in Cyprus.

Shifting Production Landscapes: The Role Of Private Renewable Producers

The association also presented updated figures on electricity production in Cyprus. Private renewable energy producers currently account for about 6.4% of total market share, operating a combined installed capacity of 324 MW. At the same time, the Public Power Corporation remains the dominant producer, generating approximately 72.6% of the country’s electricity.

This imbalance between public generation and private renewable production continues to shape discussions about market liberalization and competitive conditions in the sector.

Critical Review Of Public Power Corporation’s Renewable Energy Portfolio

During the briefing, the association also reviewed the Public Power Corporation’s progress in renewable energy development. Over the past decade, the corporation has received licenses for 28 renewable projects with a combined capacity of 171.9 MW. However, only five projects, totaling 23 MW, are currently operational. The association also noted that public procurement agreements allow the corporation to purchase renewable energy at a regulated price of 11 cents per kilowatt-hour. Data from the Cyprus Energy Regulatory Authority (ΡΑΕΚ) indicate that by August 2025, approximately 26% of Cyprus’s electricity will come from renewable sources. Of that amount, about 21% is commercially utilized by the corporation through feed-in tariff and net-billing contracts.

This analysis highlights the need for further reforms in Cyprus’s energy sector. Increased investment in renewable energy, energy storage and natural gas infrastructure could help reduce electricity costs while improving efficiency and sustainability across the market.