Cyprus will launch its competitive electricity market on 15 September 2025, but Energy Minister Giorgos Papanastasiou said price reductions remain uncertain as the model has not been tested in smaller markets.
The Cyprus Energy Regulatory Authority (CERA) announced that commercial operations would begin 15 September, with the first Trading Day set for 1 October 2025.
“In larger markets historically, when the competitive market starts, prices usually remain at the same levels and then, due to competition, a decline is created,” Papanastasiou said. “In a smaller market, which has not been tested often, we will see as we go along.”
The minister noted the government retained authority to intervene “if we see things going in the wrong direction.”
The announcement followed 18 months of coordination between the ministry, Cyprus Independent Transmission Operator and CERA to establish the market framework and pass relevant legislation.
Trial operations began in January 2025 and typically last six months, with completion expected in July. CERA determined the transition should not occur during summer peak demand periods to enable better management of potential operational issues.
Under the new system, energy producers and suppliers will operate in a market environment resembling a stock exchange, with half-hourly trading sessions. The Independent Transmission Operator will manage operations, backed by Eurobank Greece as general clearing member.
Suppliers will compete based on procurement prices achieved in the market, creating continuous competition for consumers. The minister said multiple companies already operate in generation, with six to seven suppliers active.
“I believe that with yesterday’s CERA announcement, even those who had ignorance or showed no interest will think that if we are not in when it starts, we will be out,” Papanastasiou said.
Existing suppliers beyond the Electricity Authority of Cyprus currently serve only large industrial consumers but are expected to target smaller residential customers following market liberalisation.
The Target Model adopted bases electricity pricing on the most expensive generation source to create an investment environment for renewable energy. Despite renewable energy expansion and storage adoption, conventional generation remains necessary for grid stability.
“Even with hours when you are forced to buy from the expensive one, you hope that most hours you buy from the other who produces with different technology. This will increase renewable penetration,” the minister said.
Current Electricity Authority charges related to generation and grid usage will continue for consumers choosing alternative suppliers. Pollution penalties will apply based on individual generator emissions, requiring the state utility to reduce costs and emissions to maintain competitiveness.
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