Cyprus Launches Competitive Electricity Market: A Major Step Towards a Green Energy Future

The PHAETHON Centre of Excellence leads the way in tracking Cyprus’s energy transition, releasing its first Electricity Market Report.

Nicosia, Cyprus — On 1 October 2025, the Republic of Cyprus officially launched its competitive electricity market, marking a transformative milestone in the country’s energy transition. For the first time, Cypriot consumers can now choose their electricity supplier, while producers, suppliers, and renewable energy aggregators compete to offer better prices and services.

This long-anticipated reform promises to modernise Cyprus’s isolated power system, boost renewable energy integration, and reduce dependency on fossil fuels. The initiative aligns with national and European climate goals, paving the way for a more sustainable and resilient energy future.

To mark this critical development, the PHAETHON Centre of Excellence (CoE) — a leading Research and Innovation Centre of the University of Cyprus, specialising in intelligent, efficient, and sustainable energy solutions — has released its first Electricity Market Report, offering analysis and insights into market performance during its first week of operation. The report is available via the Centre’s website: https://www.phaethon-coe.eu/nv4n

“The launch of the competitive market is a pivotal step for Cyprus”, underscored the Chief Executive Officer of PHAETHON CoE, Professor George E. Georghiou. “It’s not just about opening the market — it is about unlocking the potential for cleaner, smarter, and more consumer-friendly energy systems”.

How the New Market Works

The new electricity market is structured into several interlinked components:

• Forward Market: Where bilateral energy contracts are made between parties without the direct financial involvement of the Market Operator.
• Day-Ahead Market: Prices are set daily, based on supply and demand forecasts from producers and consumers.
• Balancing Market: Ensures real-time stability between electricity supply and demand.
• An Integrated Scheduling Process (ISP) coordinates system-wide generation and reserves for operational efficiency.

First Week Highlights: A Promising Start

In its first week of operation, 17 market participants — including energy producers, suppliers, and renewable aggregators — actively traded electricity. According to data from the Market Operator:

• The Average market price during the first week was 159 €/MWh, compared to 150 €/MWh in September under the transitional system.
• The market experienced its highest price spike on 6 October, reaching 500 €/MWh during evening peak hours with low renewable output.
• Conversely, periods of high renewable generation saw zero or near-zero prices, showcasing the cost-saving power of clean energy.

These patterns reinforce a critical takeaway: renewables are key to price stability and affordability, while reliance on conventional generation during peak demand still drives up costs. The first week also demonstrated operational stability, suggesting a smooth transition into competitive trading.

What’s Next?

Though still in its early days, the competitive electricity market is expected to evolve, bringing increased competition, greater transparency, and stronger incentives for renewable energy deployment. These developments are set to deliver lasting benefits for both consumers and the environment.

The PHAETHON Centre of Excellence will continue to provide expert analysis and technical support as the market matures — contributing to innovation, grid optimisation, and evidence-based energy policy.

As part of this effort, PHAETHON CoE will release periodic electricity market updates, as well as timely, in-depth analysis through a dedicated online portal, to be launched soon.

For further information, please contact Professor George E. Georghiou at georghiou.george@ucy.ac.cy , Dr Andreas Kyprianou at kyprianou.andreas.1@ucy.ac.cy or Mr. Stylianos Loizidis at loizidis.stylianos@ucy.ac.cy.

Download Report

You can download the first PHAETHON Electricity Market Report (available in both English and Greek) here: