PHAETHON Analyses Fourth Month of Competitive Electricity Market: Weather, Demand, and Price Extremes in January 2026

The Republic of Cyprus’s competitive electricity market has now completed its fourth full month of operation, offering further insight into how adverse weather conditions, seasonal demand, and renewable energy availability interact within the new market framework. The January 2026 results reveal market dynamics that were more pronounced than those observed in December, driven by low temperatures, elevated dust levels, and increased reliance on conventional generation.

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 January Electricity Market Report — the fourth 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.

“January’s results highlight the combined impact of weather-driven demand, constrained photovoltaic output, and limited system flexibility on price formation,” underlined Professor George E. Georghiou, Chief Executive Officer of PHAETHON CoE. “While renewables already play a decisive role, their ability to deliver sustained price reductions depends critically on residual load and the availability of flexibility, particularly during periods of high demand.”

📊 Key findings from January 2026:

• The average Day-Ahead Market (DAM) price increased to €169.22/MWh, the highest level observed since the market’s launch, reflecting increased reliance on conventional generation under adverse weather conditions.
• Low- and zero-price events declined significantly, with only 9 out of 31 days recording at least one MCP below €100/MWh, compared to 15 days in December.
• Two extreme high-price events were recorded on 26 and 28 January, with MCPs exceeding €250/MWh, driven by elevated electricity demand during cold periods.
• Forward Market (FM) traded volumes remained comparable to October levels but lower than in November and December, while the share of subsidised RES–National Grant Plans (NGPs) reached its highest level among all months analysed.
• Conventional generation increased substantially compared to previous months, while average RES generation was slightly lower than in October but higher than in November and December.
• Intraday price formation continued to follow a three-period pattern: stable prices overnight, midday price reductions during photovoltaic (PV) generation hours, and price recovery in the evening as RES output declined.
• Scatter-plot analysis confirms that market prices are jointly determined by RES availability, residual load, weather conditions, and system flexibility, rather than by renewable generation alone.

Taken together, the January results underline both the resilience and current structural limitations of Cyprus’s emerging competitive electricity market. They reinforce the importance of flexibility solutions, storage, and demand-side measures in enabling high renewable penetration to consistently translate into lower prices and reduced volatility — particularly during periods of adverse weather and elevated demand.

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 – January 2026 here: