Across Europe, the question of how to deliver affordable, reliable, and environmentally responsible electricity is taking center stage. In the United Kingdom and Cyprus, two very different energy markets are wrestling with the challenge of keeping the lights on without breaking the bank—or the planet. As both countries pursue reforms and grapple with the realities of renewable energy integration, their experiences reveal the complex, sometimes contradictory, forces shaping the continent’s energy future.
In Britain, the rapid expansion of wind farms has been hailed as a cornerstone of efforts to decarbonize the national grid. With over 2,500 wind farms dotting the landscape—most clustered in Scotland, Yorkshire, and the North East—renewable energy’s promise seems within reach. Yet, as Greg Jackson, CEO of Octopus Energy, recently explained to The Independent, the infrastructure needed to carry this green power to consumers simply isn’t keeping up.
“The system operator looks at a map and they realize there is a bunch of generators that are going to get paid but their electricity won’t get to market because of grid congestion, so they pay them anyway, and then they find someone else to fill the gaps and pay them,” Jackson said. “It is a racket.”
This “racket,” as Jackson calls it, is costing British households dearly. Since January 2025, the practice of paying wind farms not to generate electricity—known in the industry as ‘curtailment’—has already cost £1 billion, up from £780 million in 2023 and nearly matching the £1.2 billion spent in all of 2024. The National Energy System Operator (Neso) compensates wind farms for the energy they would have produced but couldn’t deliver due to grid bottlenecks, then pays gas-powered stations or other sources to make up the shortfall. Sometimes, companies owning both wind and gas plants get paid twice.
These costs, inevitably, trickle down to consumers. According to think-tank Carbon Track, curtailment added about £40 to the average UK household’s annual bill in 2023. And with the energy price cap set to rise by another £35 from October 1, pushing average yearly bills to £1,755, many are feeling the pinch. Neso estimates curtailment makes up to 3.5% of household bills, warning the figure could rise as more wind farms come online without matching grid upgrades.
Ofgem, the UK’s energy regulator, has ordered faster grid connections, but Jackson argues the regulatory framework remains flawed. “The regulation said ‘if you build the wind farm, until you get the connection we’ll still pay you for the electricity you could have generated’,” he explained. “It’s like building a factory where there are no roads and then being paid for what you might have produced if there had been roads... Originally, it was meant to be a short-term sticking plaster, but it has been exploited by companies; and so increasingly, they get their revenue, not from electricity, but from being paid not to generate it.”
Jackson projects the cost of wasted wind power could soar to £8 billion by 2030 unless the system is reformed. One proposed solution—‘zonal pricing’—would break the national market into regions, with prices reflecting local supply and demand. This could make electricity cheaper in wind-rich Scotland but more expensive in the South East, potentially encouraging businesses to relocate closer to renewable sources. However, in July, Energy Secretary Ed Miliband rejected this approach, opting instead to maintain a single national wholesale price and focus on mapping future energy projects up to 2050.
The government insists it is investing in new grid infrastructure and reforming planning rules to ensure renewable projects are built in the right places, aiming to “minimize constraint costs and meet the capacity needed to deliver clean power by 2030.” Still, the UK’s electricity prices remain stubbornly high—almost 20% above the EU average in the second half of 2024. Jackson, who rates the UK’s clean energy performance at just 5 out of 10, blames entrenched interests: “In a market like energy, that’s so dominated by incumbents, the lobbying holds back change and consumers suffer.”
Yet, there are signs of progress. Octopus Energy, founded in 2016, has disrupted the market, overtaking the “big six” to become the UK’s largest provider with revenues nearing $20 billion. The company has pioneered 5,000 “zero bills” homes, equipped with solar panels and heat pumps, and Jackson himself has been named to The Independent’s Climate 100 list. He’s also set to deliver a keynote at Climate Week in New York, underscoring his growing influence.
Meanwhile, in Cyprus, a different kind of energy experiment is about to begin. On October 1, 2025, the island will launch its Competitive Electricity Market (CEM), theoretically allowing all suppliers—state and private—to compete for customers. The hope is that competition will bring down Cyprus’s notoriously high electricity prices. But, as local analysts and the energy minister himself admit, the outcome is far from certain.
Currently, the state-owned Electricity Authority of Cyprus (EAC) is the sole conventional producer, relying on expensive diesel and heavy fuel oil (HFO). While Cyprus boasts over 1,000 MW of installed renewable capacity, renewables account for just 24% of its electricity generation—well below the EU average of 42.5%. Worse, about 80% of renewable electricity is controlled by a handful of producers, effectively operating as a cartel and keeping prices just below EAC’s rates.
Under the new CEM, consumers with their own renewable systems can sell excess electricity back to the grid at market prices. The energy minister described the market as functioning “like a stock market for electricity, with hourly price quotes determining the price of electricity,” and noted that it is backed by Eurobank. Nevertheless, Cyprus’s small, isolated market and lack of interconnections with neighboring grids limit the potential for real competition or dramatic price drops.
Other island nations offer a stark comparison. Malta, for instance, operates a single-buyer market and relies on natural gas, resulting in the lowest electricity prices in Europe in 2024—just €0.13/kWh, less than half the EU average. Cyprus, by contrast, had one of the highest at €0.33/kWh. Greece, despite embracing the EU’s competitive market model, has also struggled to deliver price reductions, with officials now pushing for reforms to ensure the benefits of renewables are passed on to consumers.
In Cyprus, the risk is that CEM will simply entrench existing distortions and excess profits for a few producers, rather than delivering savings for households. As the energy minister candidly admitted, “I cannot tell you whether the price will go down, because this particular model, namely the ‘target-model’, has not been tested in small markets such as in Cyprus… we will see it over time.” He promised to intervene if competition fails to deliver results or disrupts the system, pledging to protect consumers’ interests as early as 2026 if necessary.
The single most important factor for reducing prices, experts agree, is the import of liquefied natural gas (LNG), which would allow Cyprus to switch from costly diesel and HFO to cheaper, cleaner natural gas. With nearly 300 billion cubic meters of LNG expected to enter the market before 2030, the hope is that electricity prices could be slashed by more than half—if the infrastructure can be built in time.
Both the UK and Cyprus find themselves at crossroads, balancing the promise of renewables with the practicalities of markets, infrastructure, and affordability. Their next moves will shape not just bills, but the broader trajectory of Europe’s energy transition.
