Nicosia, Cyprus. The European Central Bank published a paper warning that Europe’s fragmented energy system continues to expose firms to high and uneven energy costs, with implications for countries such as Cyprus. Eurostat data showed Cyprus recorded the EU’s second-highest electricity prices for non-household consumers in the second half of 2025.
Eurostat data shows wide divergence in business electricity prices
Cyprus recorded electricity prices of €24.29 per 100 kilowatt-hours for non-household consumers in the second half of 2025, behind Ireland at €25.52. Germany followed at €22.64, while Finland and Sweden recorded €7.48 and €9.70 respectively.
The data covers businesses consuming between 500 megawatt-hours and 2,000 megawatt-hours annually and placed Cyprus in the upper tier of EU energy costs for firms.
ECB paper links energy security to competitiveness and vulnerability to shocks
The ECB policy paper, titled ‘Energy security and industrial competitiveness the case for a European Energy Union’, said the European Union’s continued reliance on imported fossil fuels leaves it vulnerable to external shocks, including the Middle East conflict in 2026, and weakens long-term industrial competitiveness.
It said the EU imports almost all of the oil and gas it consumes, increasing exposure to geopolitical disruptions that can quickly affect energy prices and economic stability. The authors, Charlotte Grynberg, Francesca Vinci and Alessandro De Sanctis, said such vulnerabilities can also affect the broader euro area economy, including the conduct of monetary policy.
Cyprus energy use profile and EU market integration
The paper said Cyprus stands out within the EU energy landscape due to its relatively low reliance on electricity and gas in industry. It noted that in Cyprus, electricity and gas account for around 22 per cent of industrial energy use, compared with 87 per cent in Luxembourg.
The ECB said fragmentation contributes to price disparities across the bloc and that energy remains one of the least integrated components of the EU single market despite decades of reform efforts.
How could deeper EU energy market integration affect the prices paid by businesses in your country?