The problems and distortions arising from the first year of operation of the Competitive Electricity Market (CEM) were discussed on Tuesday in the Parliamentary Committee on Energy, following a motion to discuss the issue submitted by AKEL MPs Andreas Pasiourtides, Giannakis Gabriel, and Konstantinos Konstantinou.
Mr. Pasiourtides, in remarks made after the Committee meeting, said that one year after the launch of the competitive electricity market, AKEL deemed it appropriate to raise the issue on its own initiative, “to assess how the market has functioned during this first year, to see if there are any distortions or issues that need to be corrected, and ultimately, whether the AAH serves the primary objective for which it was created, namely to reduce costs for the end consumer.”
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According to the AKEL Member of Parliament, this past year has seen significant challenges and malfunctions that affect both the effectiveness of competition and the achievement of the intended goal. Among these, he said, are the limited number of active participants, the constraints of the electrical grid, the need to strengthen energy storage infrastructure, curtailments in renewable energy production, and persistently high energy prices for households and businesses.
“The challenge remains to foster genuine and effective competition, attracting new suppliers, and ensuring that the benefits of market liberalization translate into lower electricity prices for households and businesses,” he said.
He added that the opening of the electricity market in October 2025 was preceded by a long transition period, which, rather than serving as a time for preparation, to minimize distortions as much as possible, “the transition period served to allow certain individual investors to reap privileges and excessive profits; through bilateral contracts, sold cheap green energy for about five times the cost at which they produced it,” he said.
Mr. Pasiourtides added that for AKEL, the dilemma is not “Market or No Market,” but “which Market.” “What is needed is genuine and healthy competition, transparency, security of supply, and affordable electricity prices,” he noted.
He added that since 2015, AKEL had highlighted the consequences of potential distortions, the need to protect the EAC, and the risk that market liberalization could serve private interests without corresponding benefits for consumers. “We have never bought into the narrative that competition alone will lower prices, as long as distortions persist in Cyprus, the most significant of which is the enormous dependence on fossil fuels, due to the spectacular failures in the energy sector by both the previous and current governments,” he said.
He reiterated that AKEL’s position is one of transparency, support for the EAC as the backbone of the energy system, comprehensive energy planning, and addressing the systemic problems and distortions that arose during the first year of operation.
“Until the market lowers prices for end consumers, we will periodically demand oversight, accountability, and reports from all key players in this new AAH system on what they are doing to achieve the primary objective,” he noted.
When asked whether the market is currently accessible to households, Mr. Pasiourtidis answered in the negative. “The AAH, as presented, should operate in such a way that private companies, in addition to the EAC, can offer households the opportunity to enter into contracts with them,” he said.
When asked if he agreed with the view that the AHK exploits its dominant market position, he said that the AHK’s large market share is a fact, since it was the sole provider for many years. “However, the market was opened up so that the pie could be divided evenly among providers, without this meaning that the AHK will cease to have a reason for existence.”
When asked how many providers are currently active in the AAK, he said there are 11, but the CERA was not prepared to disclose each provider’s market share. Some of the stakeholders, he said, claim that the AHK holds a 90% market share.
Source: CNA
