Adoption of new legislation for the Cyprus electricity market by the Parliament

On Thursday 23^rd of September 2021, the Parliament of Cyprus voted for the enactment of new legislation for the Cyprus electricity market. This new legislation includes: a) The amendment of the Electricity Market Law 2021, b) the Establishment and Operation of the Cyprus Energy Regulatory Authority Law 2021 and c) the Natural Gas Market (Amendment) Law of 2021. These laws are essentially the most significant reforms to the electricity market after the entry of Cyprus into the European Union and they mark the commencement of a competitive market model.

Firstly, the amendments to the Electricity Market Law 2021 allow the introduction of a new licensing regime for production, transmission, distribution, supply, and storage of electricity. Moreover, this Law aims to give enhanced protection to consumers, to open up access to the electricity market and to ensure more affordable and transparent pricing. Besides, based on this new law, third parties can have access to the transmission and distribution infrastructure which aims to bring national legislation in line with the European acquis.

Secondly, the Establishment and Operation of the Cyprus Energy Regulatory Authority Law 2021 relates to the changes brought to the operation of the Cypriot Energy Regulatory Authority (“CERA”) and purports to harmonise national legislation with the European Union’s requirements. Finally, the amendments of the Natural Gas Market Law relate to amendments effected to the Natural Gas Market Law in order to comply with the provisions of the above amended legislation.

These new laws will bring substantial changes to the structure of the Cypriot electricity market:

• The Transmission System Operator will be a fully independent and autonomous entity based on public law, whilst CERA and its office will be considered as a single legal entity under public law.

• The position, rights and the role of the end clients / consumers of electricity will be empowered with the introduction of further protection, new rights and provisions.

• Allowing for the right to change a supplier in a maximum period of 3 weeks and from 1/1/2026 within 24 hours and direct or indirect participation of the end consumers in the electricity market. Furthermore, it provides for the establishment and operation of citizen energy communities, protection of personal data etc.

• These laws will also adjust matters relating to determination, the ways of measuring and benchmarking energy poverty, the definition of vulnerable clients and the different categories and measures that can be taken for clients’ protection.