Cyprus’s electricity market is not bringing meaningful price cuts for the majority of consumers, according to energy expert Christos Hadjilaou, who says the current system is marked by serious distortions and a clear divide between winners and losers.
He pointed in particular to the rapid expansion of photovoltaic systems and the structure of the so-called competitive electricity market, arguing that the benefits are not being shared evenly across society.
Expert warns of deep distortions in power market
Hadjilaou said that the spread of solar panels in recent years through net metering has brought major benefits to tens of thousands of households, which now enjoy low electricity costs. However, he argued that this development was not matched by the necessary planning, resulting in system costs being shifted onto other consumers.
Solar users and large consumers seen as main beneficiaries
Based on his assessment, those who benefit most from the current electricity market structure are consumers who have installed photovoltaic systems, along with large commercial and industrial users that secure discounts through contracts in the competitive market.
“Those who have photovoltaic systems enjoy cheap electricity, while the cost caused by photovoltaics is carried by the rest of the public who remain with the Electricity Authority,” he said.
Most consumers still carry the burden
At the same time, he said that discussion around cutting the price of electricity per kilowatt-hour can be misleading when presented without distinction, since not all consumers are affected in the same way.
Instead, he described an electricity market of “many speeds”, where different groups of consumers face entirely different costs and burdens.
“Seventy-five per cent of consumers are the ones carrying all the weight,” he said, adding that any discussion about consumers should focus first and foremost on the majority.
“Redistribution of the pie”, not real competition
Hadjilaou also voiced reservations about the competitive electricity market itself, saying it does not create genuine competition under current conditions.
As he explained, the entry of large organisations into the system does not increase production or fundamentally diversify the electricity market. Rather, it leads to a redistribution of the existing “pie”.
“The government is trying to create a duopoly. Where we now have the dominant position of the Electricity Authority, which is a large semi-governmental organisation, another large semi-governmental organisation will be added, and these two children of the government will compete with each other in a competitive market that is completely immature,” he said.
In this context, he argued that substantial reductions in electricity prices should not be expected, since the overall market structure remains unchanged and the outcome does not shift in favour of the wider public.
Also read: Fuel prices: debate over tax reduction impact and implementation
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