Speaking on state radio today, the Minister of Energy, Commerce and Industry, George Papanastasiou, addressed recent critical reports accusing him of inconsistency regarding the expected impact of a competitive electricity market on consumer prices.
Responding to claims of a “lack of seriousness” made in the front page of Alitheia newspaper – which accused him of initially supporting the competitive market model to lower electricity prices and later expressing doubts – the Minister said he had not seen the report. However, he reiterated that the competitive market model set to launch on 1 October 2025 is the implementation of a decision taken back in 2019.
He stressed that this development represents a “success of the current government,” noting that it follows a long transitional period which led to serious distortions in the electricity market.
Concerns over cost
When asked whether the market opening will lead to lower electricity prices, Mr Papanastasiou was noticeably reserved. “I can’t tell you whether prices will go down, because the specific model – the ‘Target Model’ – has not been tested in small markets like Cyprus,” he said.
The Minister explained that Malta, the smallest electricity market in Europe, has opted for a different approach – the single-buyer model – where all electricity production is centralised under a single supplier who then distributes it to all consumers.
“In our case, a 2019 decision committed us to the ‘Target Model’, which outlines a different market structure,” he added, noting that the model ideally requires electricity interconnection, which Cyprus currently lacks.
What will determine prices
Mr Papanastasiou emphasised that final consumer costs will depend heavily on how competition functions within the new market.
“If you’re asking the Minister whether prices will go down, the answer will largely depend on how market participants compete in a small market that has chosen to implement the ‘Target Model’,” he concluded.
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Source: Economy Today
