Moving Towards a European Electricity Market

Published on Friday, 21 November 2014

The energy sector in Europe is emblematic of the contradictions European politics and economics: it's a continent where huge potential and serious strategy issues side-by-side. Despite its well-balanced energy generation mix it doesn't have a single market, which would improve energy security and reduce costs.

The scarcity of fossil fuels created a long-lasting dependence on Russia and North Africa and as a consequence unstable supplies. However the desire to create a common strategy for the decarbonisation of the economy by 2050 and the creation a single energy market is turning Europe into a key energy player. 

Common regulations will enable a larger number of consumers to benefit from technological diversification without being hampered by domestic or regional boundaries. Additionally, the full integration of the European energy market and infrastructure will enable prompt action in case of energy disruptions and direct flows across the whole of Europe, whenever that may be necessary.

Central European countries already have an infrastructure that could support an integrated continent-wide electricity market, and by 2030 connections between the nations will further increase by 15 percent. This measure was introduced in October by the European Council, which also confirmed the 40 percent greenhouse gas target compared to 1990 levels, as well as the target of meeting 27 percent of end energy consumption through renewable sources.  

Nevertheless, the development of green energy needed for technological diversification will require new investment, making it necessary for the European Union to define a stable regulatory framework that targets the single market and enables the clear definition of long-term costs.