Nicosia, Cyprus. Delegations from Cyprus’ transmission system operator and the energy markets association met to discuss efforts to reduce electricity costs for households and businesses and improve the efficiency of the competitive energy market.
Market proposals
Both organisations said on Thursday that the energy markets association presented proposals and positions on issues within the transmission system operator’s remit.
They also exchanged views on practices that could contribute to the more efficient operation of the market and the de-escalation of electricity costs.
Competitive market
Cyprus opened its energy market to private companies for the first time in October last year.
At the time, the Cyprus Energy Regulatory Authority said the change would mark a new era for the electricity sector, with the aim of creating a fully free competitive market in which producers, suppliers and end customers can decide how to manage and pay for the electricity they produce.
Price uncertainty
Questions were raised over whether opening the electricity grid would lower consumer bills. Then energy minister George Papanastasiou said he could not say whether prices would fall because the target model had not been tested in small markets such as Cyprus.
He said the outcome would depend on how parties competed in the small market.
The target model seeks to create a unified electricity market across the European Union by opening all 27 member states’ grids to private companies, with competition expected to reduce consumer prices.
Papanastasiou said prices in larger electricity markets typically remain stable when private companies first enter before falling later because of competition. He added that the ministry could intervene if developments moved in the wrong direction.
