The Republic of Cyprus’s competitive electricity market has now completed its sixth full month of operation, providing new insights into how external factors, renewable energy generation, and system dynamics interact within the evolving market framework. The March 2026 results reveal a marked increase in electricity prices and heightened volatility, driven largely by rising fuel costs linked to geopolitical developments.
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 March Electricity Market Report — the sixth 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.
As noted by Dr Andreas Kyprianou, Associate Professor at the University of Cyprus, Member of PHAETHON CoE, and co-author of the report:
“March’s results highlight how external factors, such as fuel price increases driven by geopolitical tensions, can significantly influence electricity market outcomes. At the same time, the analysis confirms that while renewable energy can strongly suppress prices during high-generation periods, overall price formation remains dependent on residual load and system flexibility.”
📊 Key findings from March 2026:
- Average Day-Ahead Market (DAM) price: Increased sharply to €190.58/MWh — the highest level recorded since the market’s launch — primarily driven by rising fuel costs.
- Price volatility: The market exhibited strong intraday variability, with zero or near-zero prices during midday hours and sharp price spikes in the evening.
- Zero-price events: Frequently observed between approximately 09:30–15:00, reflecting high photovoltaic (PV) generation and increased renewable energy penetration.
- Maximum Market Clearing Price (MCP): Reached €299/MWh, with peak prices occurring during evening hours (19:30–21:00) when demand is high and renewable output is low.
- Forward Market (FM) activity: Average traded volume rose to 97.27 MWh, representing one of the highest levels observed since market launch.
- Generation mix: Renewable energy generation reached its highest level to date, while conventional generation remained essential in meeting demand during non-solar hours.
- Price drivers: Analysis confirms a strong inverse relationship between RES generation and prices; however, market outcomes are jointly determined by renewable availability, residual load, and system flexibility constraints.
🔎 Market insights
March was characterised by pronounced price fluctuations, with a clear three-period intraday structure: stable high prices overnight driven by conventional generation, sharp midday price reductions due to strong PV output, and significant price increases in the evening as renewable generation declines and demand rises.
The results also highlight that even at similar levels of renewable generation, prices can vary significantly depending on system conditions. This underlines the critical role of residual demand and flexibility limitations in shaping market outcomes.
Furthermore, the application of PHAETHON’s electricity price forecasting methodology continues to demonstrate strong performance in capturing low-, normal-, and high-price conditions in the Cypriot market, providing valuable insights for anticipating market behaviour under varying system conditions.
Taken together, the March results underscore both the growing impact of renewable energy and the increasing exposure of the electricity market to external cost drivers. They reinforce the importance of flexibility solutions, storage, and demand-side measures in mitigating volatility and ensuring that high renewable penetration can consistently translate into lower and more stable electricity prices.
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You can download the full PHAETHON Electricity Market Report – March 2026 here:
