Electricity exchange kicks off in Cyprus with 17 participants

The liberalization of the power market in Cyprus took effect alongside the launch of the electricity exchange, with day-ahead, forward and balancing markets.

The island country is one of the most isolated energy systems of the European Union. It relies on expensive oil plants to cover its power needs. Cyprus has no electricity or gas interconnections, and the rate of curtailments of renewables is high.

It translates to the highest wholesale prices in Europe, as well as high retail tariffs for consumers. The project for the Great Sea Interconnector linking the electricity systems of Cyprus and Greece would ease the strain, but it is suffering massive delays due to geopolitical and economic factors.

With the liberalization, 17 participants can submit offers and form prices in the day-ahead, forward and balancing markets, which the Transmission System Operator of Cyprus (TSOC) operates.

Specifically, there are two conventional producers, two suppliers, nine aggregators and three renewable energy producers, according to the Cypriot Electricity Market Association (CEMA). Trading works in 30-minute intervals, instead of the monthly settlements until September 30 and today.

TSOC reported that prices in the day-ahead market for October 1 ranged from zero to 180 per MWh. The level cratered from EUR 150 per MWh to nothing for the interval for delivery from 11:00, and remained there through 14:30. The price was EUR 1 per MWh for the next half hour, only to jump to EUR 151 per MWh in the next time segment.

The daily high was registered at 19:30. Most intervals were at EUR 160 per MWh to EUR 170 per MWh.

Consumers will gain from flexible tariffs

The operator and the Ministry of Energy, Trade and Industry are hopeful that new markets would remove market distortions. Furthermore, flexible tariffs can be offered to final consumers.

“Independent suppliers can now form their own energy mix, combining conventional and renewable sources. This allows them to offer flexible tariffs with reduced prices during the hours of increased renewable production and at night,” CEMA stressed.

EAC: A chance for the green transition

“Our organization is ready and committed to continue being a reliable pillar for electricity in Cyprus… The opening of the market is not just an institutional change, but a chance for growth, for the green transition and improving everyday life for citizens,” state-owned Electricity Authority of Cyprus (AIK or EAC) said. It is the dominant producer in the island.