PHAETHON Analyses July 2026 Competitive Electricity Market: Record-High Prices & No Zero-Price Periods

July 2026 marked the tenth full month of operation of Cyprus’ competitive electricity market, with particularly high electricity demand shaping market outcomes during the summer period. The average Day-Ahead Market (DAM) Market Clearing Price (MCP) reached its highest monthly level since the launch of the competitive market, while, in contrast to the preceding months, no zero- or very low-price periods were recorded. These developments reflected the increased demand associated with summer air-conditioning requirements and the continued need for conventional generation, even during periods of high photovoltaic (PV) output.

Against this backdrop, the PHAETHON Centre of Excellence (CoE) has published its July Electricity Market Report, providing a detailed analysis of developments in the Forward Market (FM) and DAM, price formation, generation patterns, renewable energy participation and electricity price forecasting.

The July results also point to continued growth in market activity, with average Forward Market traded volumes reaching a new monthly high. Meanwhile, both conventional and renewable energy volumes cleared in the DAM recorded their highest monthly averages since market launch, illustrating how higher electricity demand increased the need for energy from both sources.

As noted by Dr Andreas Kyprianou, Associate Professor at the University of Cyprus, Member of PHAETHON CoE, and co-author of the report:

“July marked a significant shift in the operation of Cyprus’ competitive electricity market, with exceptionally high summer demand contributing to the highest average Day-Ahead Market price recorded since launch. Although photovoltaic generation continued to reduce prices during daylight hours, its contribution was not sufficient to meet the increased demand and eliminate the need for conventional generation. The findings underline how the impact of renewable energy on market prices depends not only on its availability, but also on demand levels and the volume of conventional generation required to meet them. At the same time, Forward Market activity continued to grow, reaching a new monthly high.”

📊 Key findings from July 2026:

• Average Day-Ahead Market (DAM) MCP: €222.93/MWh — the highest monthly average recorded since the launch of the competitive electricity market, representing an increase of approximately 28.6% compared with June.
• Volume-Weighted Average Price (VWAP): €225.85/MWh — exceeding the previous monthly high recorded in April and reversing the downward trend observed during May and June.
• Zero-price events: no zero- or very low-price periods were recorded throughout July, with MCPs remaining between approximately €140/MWh and €273/MWh.
• Forward Market (FM) activity: average traded volumes increased to approximately 129.02 MWh, reaching the highest monthly average since market launch.
• DAM-cleared energy volumes: average cleared conventional sell offers in the DAM rose to 187.43 MWh, while cleared RES sell offers also reached a new monthly high of 31.84 MWh.
• Electricity demand: average demand per half-hour trading period reached approximately 455 MWh, the highest level in the period examined, contributing to increased clearing of both conventional and renewable energy offers.
• Maximum Market Clearing Price (MCP): reached €273/MWh on 27 July, remaining at this level for six consecutive half-hour trading periods between 18:30 and 21:00.
• Intraday price patterns: PV generation continued to exert downward pressure on prices during daylight hours, with average MCPs reaching approximately €200/MWh around midday. However, high summer demand prevented the pronounced price reductions and zero-price periods observed in previous months.
• European market comparison: Cyprus recorded the highest average DAM price among the European markets examined, with the gap widening considerably in July as prices in most other markets remained substantially lower.

🔎 New insights from the July report

The July analysis provides further insight into how high summer electricity demand can alter the relationship between renewable energy generation and market prices. Despite the highest average RES volumes cleared in the DAM since market launch, increased demand meant that renewable energy alone could not satisfy the market’s requirements. Conventional generation therefore remained necessary even during periods of substantial PV output, preventing the very low and zero-price conditions observed in previous months.

The report also examines the relationship between electricity demand, generation mix and price levels, showing that the increased volume of conventional generation cleared in the DAM was a key factor behind July’s elevated MCPs. In particular, the analysis of normal- and extreme-price days demonstrates how higher demand and limited RES availability, especially during evening hours, contributed to the most pronounced price increases.

A further focus is placed on the continued growth of Forward Market activity, with average traded volumes reaching a new monthly high. The report discusses how forward contracting, including bilateral and intra-group arrangements, influences the residual energy volumes subsequently traded in the DAM, while the MCP itself is determined by the supply and demand offers cleared in that market.

Finally, the report extends the application of the PHAETHON forecasting methodology to the Cypriot electricity market, presenting forecasting results for both normal- and extreme-MCP days.

Market insights

The July findings highlight the influence of exceptionally high summer demand on Cyprus’ competitive electricity market. While increased PV generation continued to reduce prices during daylight hours, the scale of electricity demand meant that conventional generation remained necessary throughout the day. As a result, prices stayed consistently high, with substantially less pronounced intraday reductions than those observed during the preceding months.

The findings also demonstrate that record renewable energy participation does not necessarily translate into lower market prices. Although the average volume of RES sell offers cleared in the DAM reached a new high, the corresponding increase in demand also drove a substantial rise in conventional generation. The balance between these sources, rather than renewable availability alone, remained central to price formation.

The continued increase in Forward Market activity further underlines the growing importance of forward contracting in the evolving market framework. At the same time, the substantial price differential between Cyprus and other European markets points to persistent structural challenges, including dependence on liquid fuels, the absence of electrical interconnections, limited system flexibility and the operational requirements of an isolated electricity system.

Overall, the July results reinforce the importance of greater system flexibility, energy storage and enhanced renewable energy integration in helping Cyprus manage rising summer demand, make more effective use of its renewable energy resources and address the structural factors contributing to high electricity prices.

Further Information

For further information, please contact:

• Professor George E. Georghiou — [email protected]
• Dr Andreas Kyprianou — [email protected]
• Dr Stylianos Loizidis — [email protected]

Download Report

You can download the full PHAETHON Electricity Market Report – July 2026 here: