*Press Release from the Electricity Market Association
The high cost of electricity did not come to the forefront because of the recent challenge to the President of the Republic. It is a fundamental and long-standing priority of the Electricity Market Association, as the real challenge for all stakeholders in the energy sector is to substantially reduce the cost of electricity.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
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The solution does not lie in catchy slogans
The goal is shared. However, the phrase “cheaper electricity for everyone” must under no circumstances be reduced to a mere catchy slogan. Public debate is necessary and legitimate on an issue that directly affects the daily lives of Cypriot society as a whole, as well as the competitiveness of the domestic economy. However, it must not be based on oversimplifications and calculations that fail to take into account how the electricity system and the market itself operate.
The recent debate over the selling price of electricity from commercial solar farms has highlighted precisely this need. The view that lowering the selling price of solar energy could, on its own, reduce electricity bills by 20%, is not supported by actual market data and lacks any substantiation.
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The numbers matter
Numbers, especially in this case, are not merely a detail. Far from it. They are the foundation upon which proposals and policy decisions must be built, as they provide a comprehensive picture of the market.
Private renewable energy producers participating in the Competitive Market, who have been in the spotlight recently, account for approximately 6.4% of the total electricity traded, that is, 262 GWh of solar energy in the Day-Ahead Market. This means that, numerically, a 20% reduction in the total electricity bill solely from a reduction in the selling price of a portion of the generation corresponding to this small market share.
In fact, based on a simulation that assumes a price of 11 cents per kilowatt-hour for the green energy in question, the impact on the total bill is estimated at approximately 1.8%, not 20%.
Based on official data from the first six months of the Competitive Market’s operation, the claim that solar power producers generate electricity at a cost of 7 or 8 cents per kilowatt-hour and then systematically sell the energy at 25 or 30 s. Specifically, the weighted average price during hours of solar generation was approximately €118 per MWh, or about 11.8 cents per kilowatt-hour. It should be noted that the EAC already has the ability to procure energy from renewable sources with a total installed capacity of 416 MW, at a price of 11 cents/kWh, pursuant to a regulatory decision.
It is important to understand that the theoretical cost of producing one kilowatt-hour is not the same as the actual economic cost of an investment. When a solar farm faces reductions in energy output of around 60% or 65%, as occurred during the period from January to May 2026, the economic equation changes dramatically. The theoretical cost of 5–7 cents may, due to these reductions, translate into an actual cost in the range of 12.5 to 20 cents per kilowatt-hour. And this does not even take into account the cost of financing the investment, operation and maintenance, losses, as well as the hours during which prices are extremely low or even zero.
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The Paradox of the Cuts
The greatest paradox of the Cypriot energy system is that, on the one hand, we’re looking for ways to lower electricity prices, while on the other, we’re recklessly wasting large amounts of cheap, clean energyfrom renewable energy sources. Therefore, the real issue is not to look for a “culprit” for the high price of electricity. It is to create the conditions so that more affordable green energy actually reaches consumers.
Although the value of energy storage is undeniable, it remains “trapped” in the bureaucracy and complex procedures of the Distribution System Operator, even though installing storage at existing renewable energy parks can deliver immediate results. Interest in investment is significant, and the market is ready. Every day of delay has been shown to contribute to the perpetuation of a more expensive and polluting model of electricity generation.
The Real Challenge
It is clear that the price consumers ultimately pay is not determined by a single category of producers. It is influenced by the cost of conventional generation and fuels, emissions, grid costs, market operations, and the overall energy mix. So if we want to create conditions for lower electricity prices, the challenge is much greater and requires specific decisions, as well as close cooperation between the public and private sectors.
The key measures that can create the conditions for lower prices are the introduction of natural gas as soon as possible, the proper and effective operation of the Competitive Market, the reduction of renewable energy curtailments, the rapid licensing of storage systems, the modernization of the grids, and the ability of consumers to have real choices. Equally crucial is the integration of new generating capacity, and it is worth noting that the first private power plant remains out of operation despite its readiness to immediately add new generation capacity to the grid.
So, what should we do as a country that pays some of the highest electricity prices in Europe? We must stop wasting green energy. We must advance energy storage. We must strengthen the grids and expand new generation capacity. We must reduce our dependence on expensive conventional fuels. We must finally bring natural gas online. Let’s ensure that the market truly works for the benefit of participants and consumers. That is the crux of the matter. And that is also the real challenge for cheaper electricity.
