**NICOSIA** – A significant debate is unfolding within Cyprus’s energy sector, with a proposal to revert to a single-buyer electricity market, a move that could fundamentally alter the island’s energy landscape. This potential paradigm shift comes as a critical technical milestone has been achieved for the ambitious Great Sea Interconnector (GSI), a vital subsea power link intended to connect Cyprus with Greece.
The impetus behind the proposed market reform stems from concerns that the current competitive framework, which commenced commercial operations in October 2025, may not be yielding the anticipated benefits of reduced electricity prices for consumers. Odysseas Michaelides, a proponent of the single-buyer model, has publicly suggested that the Electricity Authority of Cyprus (AHK) should once again assume the role of the sole purchaser of electricity from all producers. This would represent a considerable departure from the established competitive market, where multiple producers vie to supply the grid. Michaelides has further articulated that electricity generation costs, purportedly around five cents per kilowatt-hour, are being procured at significantly higher rates, as much as twenty-two cents, raising questions about market efficiency and potential profiteering.
Adding to the complexity of the energy discourse, allegations have surfaced that certain renewable energy producers might be experiencing disproportionately large gains. In light of these concerns, and referencing guidance from the European Commission concerning the taxation of specific economic sectors, the possibility of introducing a special levy on renewable energy production has been mooted. Data provided by the Cyprus Transmission System Operator, however, offers a nuanced perspective. It indicates that since the introduction of the competitive market, the average generation cost for renewable energy, particularly during periods of ample sunshine, has ranged between approximately eleven and twelve cents per kilowatt-hour. This figure contrasts with the higher procurement costs cited by Michaelides, suggesting a more intricate reality than a simple dichotomy of high versus low prices.
Concurrently, the GSI project, a cornerstone of Cyprus’s energy security and integration strategy, has reached a pivotal juncture. A crucial deep-sea test for the submarine power cables destined for this groundbreaking interconnector has been successfully concluded in the waters west of Sicily, Italy. French cable manufacturer Nexans, utilising its specialized vessel, the Nexans Aurora, conducted the rigorous trial. This involved lowering sections of 525 kV high-voltage direct current (HVDC) cable to depths approaching 3,000 meters, connecting them underwater, and subsequently retrieving them. The cables were subjected to extensive electrical testing, operating at voltage levels exceeding standard industry requirements by 30%, and underwent thorough visual inspections to ascertain their integrity and operational readiness for the extreme pressures and conditions of the seabed.
The successful completion of this deep-sea test is an indispensable achievement for the GSI, which is poised to become one of the longest and deepest subsea power interconnectors globally. It unequivocally confirms the technical feasibility of installing and operating such sophisticated infrastructure at unprecedented depths, thereby assuaging significant engineering and logistical concerns. While the GSI project progresses, the internal deliberations regarding Cyprus’s energy market structure continue, highlighting the island’s multifaceted approach to ensuring energy affordability and security in an increasingly complex global energy environment. The outcome of the proposed market reform could herald a substantial transformation in how electricity is generated, procured, and ultimately distributed to consumers across Cyprus.