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Cyprus Faces Regulatory Challenges In Competitive Electricity Market

by THEFUTURE.TEAM

May 18, 2026

The recent launch of Cyprus’ competitive electricity market marks a significant step in modernising the island’s energy framework. However, energy expert Andreas Poullikkas, a professor of energy systems at Frederick University and former chairman of the Cyprus Energy Regulatory Authority (CERA), warns that strong regulatory safeguards remain essential to prevent market distortions and adequately protect consumers.

Strengthening The Regulatory Framework

Poullikkas emphasises that the transition toward a competitive operating model does not automatically guarantee fair pricing or stable market dynamics. The existing regulatory framework, formally known as the “Statement of Regulatory Practice and Electricity Pricing Methodology,” was designed to prevent cross-subsidisation while ensuring tariffs accurately reflect the actual cost of electricity services.

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At the same time, he argues that further refinements are still necessary, particularly regarding pricing mechanisms in the day-ahead market.

Addressing The Dominant Producer’s Market Influence

At the heart of the discussion is the method by which the dominant market player, notably the Electricity Authority of Cyprus (EAC), sets its prices in the day-ahead market. Poullikkas argues that because the EAC retains a key role in the country’s generation activity, its market bids cannot be equated with those of competitors in a fully mature market. He advocates for a clearly defined, cost-based pricing strategy that not only reflects actual variable costs and technical constraints but also guards against unpredictable cost transfers from regulated structures.

Transparent Rules For Must-Run Units

Regulatory concerns also extend to the handling of must-run generation units, which remain necessary for maintaining system reliability even when they are not the lowest-cost option available. According to Poullikkas, compensation for these units should be managed through separate and transparent mechanisms to avoid creating hidden costs within the market structure. He additionally stresses that physical allocation should take place before financial settlement so reliability-related costs do not unintentionally distort market outcomes or place additional burdens on consumers.

A Lesson In Gradual Liberalization

Poullikkas draws comparisons with electricity market transitions across the European Union, where liberalisation has historically depended on clear regulatory rules, effective supervisory oversight and carefully managed transitions away from monopolistic structures.

While he believes the core principles of Regulatory Decision 01/2021 remain solid, particularly those linked to cost-reflective tariffs and the prohibition of cross-subsidisation, he argues that their practical implementation in Cyprus still requires greater precision and clarity.

The Renewable Energy Debate And System Reliability

Beyond immediate pricing concerns, Poullikkas also challenges the assumption that increasing renewable energy capacity will automatically lower electricity prices. According to the expert, the long-term cost efficiency of the system depends not only on generation costs but also on investments in grid flexibility, storage infrastructure and energy interconnections. These issues remain particularly important for Cyprus because the island continues operating as a non-interconnected electricity system.

Conclusion: Clear Regulation For A Fair Market

In summary, ensuring that every cost is recovered just once, via the proper mechanism and with complete market transparency, is pivotal. The expert’s insights serve as a reminder that without a clear, segmented, and transparent regulatory approach, Cyprus risks creating a revenue recovery mechanism that falls short of developing a truly competitive market. The future success of the island’s energy transition hinges on these fundamental regulatory prerequisites.

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Cyprus Crypto Users Face New Risks As MiCA Rules Take Effect

by News Editor

August 18, 2026

Why Investors Need To Check The Company Behind Their Crypto Platform

Crypto users in Cyprus are being urged to verify exactly which company holds their assets after the EU’s Markets in Crypto-Assets Regulation (MiCA) transition period ended on July 1, 2026.

MiCA rules for crypto-asset service providers have applied since December 2024, but Cyprus allowed companies operating under its previous national framework to continue temporarily. CySEC required providers wishing to remain in the market to apply by February 27, 2026.

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The end of the transition means that appearing on an old national register is no longer enough. Investors must check the specific legal entity providing the service and the activities it is authorised to perform.

Two Regulatory Routes

CySEC maintains separate registers for providers authorised under Article 63 and companies using the Article 60 notification route.

The lists should not simply be treated as a count of licensed crypto exchanges. Providers have different regulatory statuses and may be authorised for different services, including custody, transfers, exchanges or operating trading platforms.

Companies authorised elsewhere in the EU can also serve Cypriot customers through MiCA passporting. Investors should therefore check the wider ESMA register.

Familiar Brands Can Still Be Used In Scams

MiCA authorisation applies to a specific legal entity, not automatically to every website, subsidiary or service using the same brand. Fraudsters can copy a legitimate company’s name, logo and licence number while changing its website or payment details.

The regulatory transition creates another opportunity for scammers. They can imitate legitimate notices about account closures or transfers and claim that customers must urgently move their assets to a new “regulated” platform.

In its July announcement, CySEC warned that customers using unauthorised providers do not receive MiCA protections and advised investors to verify providers through ESMA.

A Wider European Shake-Up

The changes affect the broader European crypto market. VASPnet estimated that more than 1,700 unlicensed crypto companies could face closure, relocation or restructuring after the transition period.

ESMA’s register contained 323 authorised providers at the end of July, while TRM Labs identified 1,343 operating providers in the European Economic Area on July 1, including 281 with MiCA authorisation. The different figures reflect different methodologies, but point to a substantial number of providers operating without the new authorisation.

ESMA instructed unauthorised companies to stop accepting new EU customers, opening accounts and marketing their services, while allowing limited activity needed for an orderly withdrawal.

What Investors Should Check

MiCA introduces common requirements for areas such as governance, disclosures and safeguarding client assets, but it does not make crypto investments risk-free.

For Cyprus users, the key questions are which legal entity provides the service, what it is authorised to do and whether the website or contact details are genuine.

Requests to transfer assets urgently, pay recovery fees, reveal private keys or install remote-access software should be treated as red flags. MiCA may bring greater clarity to the market, but the transition has also created a new opportunity for criminals to exploit a very real regulatory change.