Cyprus on Wednesday officially launched its long-awaited competitive electricity market, which Energy Minister George Papanastasiou said should ultimately drive down costs for consumers.

Speaking on the sidelines of the independence day military parade in Nicosia, Papanastasiou noted the symbolic timing of the move. “Today we celebrate 65 years of the Republic of Cyprus, and at the same time we mark, perhaps, the beginning of the competitive electricity market,” he said.

The decision to open the market was taken in 2019, and according to the minister it should have been implemented two years later.

“Instead, here we are in 2025 finally opening the market, which when fully operational will give consumers access to different suppliers,” he added.

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The minister explained that both households and businesses stand to benefit. “Through competition we want to see cost-reflective electricity production, particularly from renewables and a higher share of renewables in the energy mix. That way we can push electricity costs in Cyprus downward,” he said.

At present, there are around eight or nine suppliers, including the Electricity Authority of Cyprus, competing in the market.

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

Suppliers will buy electricity from different sources on a half-hourly basis, in a system similar to a stock exchange. “They must buy smart to sell smart, so that prices for the final consumer are reduced,” Papanastasiou stressed.

Asked why providers so far appear reluctant to target households, the minister said suppliers naturally seek the most profitable customers. Large businesses are more attractive because they consume more and are easier to manage.

By contrast, “many small household consumers represent a burden, since they consume little and involve greater management costs,” he said.

Nevertheless, he added, a truly free and competitive market should also give incentives to attract household customers and not only focus on big businesses.

In a statement released on Tuesday, 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.