Cyprus’s Transmission System Operator (TSOC) has issued a stern warning about private renewable energy producers’ reluctance to participate in the competitive electricity market scheduled for launch in the second half of 2025.
The TSOC revealed that despite repeated calls since April for producers to submit applications for the market’s third trial period, interest remains minimal.
Sources indicate that only five to six participants out of dozens currently operating under the transitional arrangement have applied.
Market observers suggest this reluctance stems partly from producers’ satisfaction with the current transitional market arrangement, which yields significant profit margins.
Under the existing system, producers secure bilateral contracts offering rates substantially higher than their solar park operational costs, while still providing commercial customers with modest discounts compared to the state electricity authority’s rates.
The TSOC emphasised that delays in application submission could prevent producers from joining the market at launch, potentially disrupting service to their current customers and further delaying market implementation.
The operator has been accepting applications since June 1, 2024.
Industry experts express concerns that the EU’s Target Model for competitive electricity markets might not lead to reduced household electricity prices in the short to medium term, and could potentially increase per-kilowatt-hour charges.
The third trial period, following two unsuccessful attempts, will simulate actual market conditions including day-ahead market operations and real-price energy bidding.
This phase will test both system readiness and verify whether market expectations of lower prices materialise.
The TSOC warned that participants in the current transitional arrangement who fail to secure their position in the competitive market “will find themselves outside the market, resulting in no revenue from their generated energy and inability to serve their contracted customers”.
Since April 2024, the TSOC has conducted informational presentations and issued announcements highlighting the benefits of trial participation, including familiarisation with the Market Management System and improved understanding of Electricity Market Rules.
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