The open electricity market finally went live on Tuesday, with producers and suppliers placing bids for the next day’s generated energy as the state-run Electricity Authority of Cyprus (EAC) welcomed the development.

The first bidding took place on the ‘electricity exchange’ in what’s known as the day-ahead market, where electricity producers – like the EAC and private solar parks – as well as suppliers bid for the energy generated every half hour.

The trades began on Tuesday, so that the electricity rates for every half hour would get ‘locked in’ for the day ahead – Wednesday, officially the launch of the open electricity market.

The electricity exchange – operated by the Transmission System Operator (TSO) – functions as a clearing house for prices.

The official launch had been preceded by a trial period which started on January 7 this year, on a simulation basis without actual money transactions. During the trial period, producers and suppliers ‘bid’ on a monthly, rather than on an hourly, basis.

Electricity Market Operation Manager at the TSO Constantinos Varnava told daily Phileleftheros that, regardless any glitches that may come up during the first days of the market’s operation, provision of electricity to all consumers would be unaffected.

Varnava said consumers should not expect to see benefits from the first few days of the new market, as suppliers will need some time to adapt and offer flexible rates to customers.

Meanwhile, the TSO said Tuesday was a milestone for the electricity market in Cyprus.

Speaking to the Cyprus News Agency earlier, the TSO official explained that via the use of smart meters, electricity pricing can be structured so that wholesale prices get translated into retail prices.

Consumers, he said, can change the times during which they make heavy use of electricity, taking advantage of the lower prices on offer.

From the available data on Tuesday, posted on the TSO website, it seems that lower prices will be offered around noon and in the early afternoon. In the late afternoon and in the evening, when almost all electricity generation comes from the EAC’s mazut-powered stations, the wholesale price will go up substantially.

For example, the price clearing on Tuesday showed wholesale prices (for Wednesday) peaking at around €180 per megawatt-hour from 6.30pm to 8.30pm. The lowest price clocked at about €10 per megawatt-hour at 12.30pm.

Market observers said that during the initial phase of operation of the market, private suppliers would likely not demonstrate interest in domestic consumers, preferring to sell to large commercial and industrial customers.

In a statement, the EAC said it was ready to “enter the new era”.

The state-run power utility welcomed the opening of the competitive electricity market, noting that it has made all the necessary infrastructure investments and adopted best practices.

“The EAC guarantees that individuals and businesses alike will continue enjoying safe and uninterruptible electricity, in an environment that promotes competition and innovation”.

It added: “The opening of the market signals more than just an institutional change. It is a new opportunity for growth, for the green transition and for upgrading the daily lives of people.”