PHAETHON Analyses Fifth Month of Competitive Electricity Market: Strong PV Generation and Zero-Price Events in February 2026

The Republic of Cyprus’s competitive electricity market has now completed its fifth full month of operation, offering further insight into how favourable weather conditions, photovoltaic (PV) generation, and system dynamics interact within the new market framework. February 2026 saw a noticeable return of low and zero-price events during midday hours, driven by strong PV output and improved solar irradiation compared to January.

This competitive market framework continues to enhance transparency, strengthen consumer choice, and support Cyprus’s long-term objectives for renewable energy integration, energy security, and alignment with European decarbonisation policies.

At the forefront of monitoring and analysing this transition, the PHAETHON Centre of Excellence (CoE) has published its February Electricity Market Report — the fifth in a monthly series delivering transparent, data-driven analysis of Forward Market activity, Day-Ahead Market price formation, generation mix trends, and the evolving role of renewables in shaping market outcomes. This edition also introduces the first application of PHAETHON’s electricity price forecasting methodology to the Cypriot market, extending the Centre’s analytical toolkit to include short-term market price prediction.

As noted by Dr Andreas Kyprianou, Associate Professor at the University of Cyprus, Member of PHAETHON CoE, and co-author of the report:

“February’s results demonstrate how strong photovoltaic generation can significantly suppress electricity prices during midday hours. At the same time, our analysis confirms that renewable availability alone does not determine price outcomes — residual load and system flexibility remain critical factors. Importantly, this report also marks the first successful implementation of PHAETHON’s electricity price forecasting methodology in the Cypriot market, providing a valuable tool for anticipating market behaviour under different renewable and demand conditions”.

📊 Key findings from February 2026:

• Average Day-Ahead Market (DAM) price: Declined to €155.09/MWh, lower than the levels recorded in November–January but slightly higher than in October.
• Zero-price events: Recorded on 23 out of 28 days, typically between 08:30 and 15:00, reflecting strong photovoltaic (PV) generation during midday hours.
• Maximum Market Clearing Price (MCP): reached €201/MWh, significantly below the extreme price levels observed in January, with no extremely high-price events recorded during the month.
• Forward Market (FM) activity: Remained broadly stable at an average 94 MWh traded, while the share of RES generation under National Grant Plans (NGPs) reached its highest level since the market’s launch.
• Intraday price formation: Followed a clear three-period pattern – stable overnight prices driven by conventional generation, sharp midday price reductions during peak PV output, and price recovery in the evening as renewable generation declines.
• Price drivers: The analysis confirms that market prices are jointly determined by RES generation, residual load, and system flexibility, highlighting the importance of flexibility solutions as renewable penetration increases.

🔎 New in this report

• PHAETHON’s electricity price forecasting methodology: Previously applied in European electricity markets, it was successfully implemented for Cyprus, demonstrating strong performance in predicting both low-price and normal-price market conditions. This tool provides actionable insight into how PV generation, residual load, and system flexibility interact to shape prices.

Taken together, the February results highlight the increasingly visible impact of photovoltaic generation on Cyprus’s emerging electricity market. At the same time, they underline the importance of flexibility solutions, storage, and demand-side measures in ensuring that high renewable output can consistently translate into lower prices and efficient market operation.

Further Information

For further information, please contact:

• Professor George E. Georghiou — georghiou.george@ucy.ac.cy
• Dr Andreas Kyprianou — kyprianou.andreas.1@ucy.ac.cy
• Mr Stylianos Loizidis — loizidis.stylianos@ucy.ac.cy

Download Report

You can download the full PHAETHON Electricity Market Report – February 2026 here: