Abstract
The European electricity market liberalization process started more than 20 years ago, one of its main purposes being to organize the provision of electricity and gas more efficiently by introducing competitive forces where possible and regulation where needed. Despite the fact that most Member States of the European Union (EU) have liberalized their electricity market, a European internal market for electricity—one of the ultimate goals of EU energy policy—has not been realized yet. For this to be realised a number of remaining obstacles need to be removed. This paper gives a brief overview of the EU electricity market liberalization process and surveys the main remaining issues and challenges. At the retail market level, additional efforts are required to increase retail competition and to remove regulated retail prices. Also, more effort is required to physically integrate existing regional electricity markets, by removing the existing barriers between regions and countries. Building new interconnection capacity and improving the allocation procedures for cross-border capacities can help achieving this. Furthermore, the EU should increase efforts to further harmonize and integrate electricity markets and electricity market policies and to encourage the demand-side of the market to participate more intensively through demand response.
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Notes
Some Member States had two of such vertically integrated firms, but then these forms would be regionally organized.
CIA World factbook: https://www.cia.gov/library/publications/resources/the-world-factbook/.
Directive 96/92/EC and Directive 2003/54/EC. Both Directives and other legal texts can be download from https://eur-lex.europa.eu/.
For a more detailed description, we refer to (IPA Advisory Limited [15]). This document can be downloaded from the ACER website.
For a description of each of these regions, we refer to ACER decision No 06/2016 of 17 November 2016, to be found on the website of ACER.
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This paper is based on a presentation for the 2017 International JEPA conference in Okinawa, Japan (November 4, 2017).
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Pepermans, G. European energy market liberalization: experiences and challenges. IJEPS 13, 3–26 (2019). https://doi.org/10.1007/s42495-018-0009-0
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DOI: https://doi.org/10.1007/s42495-018-0009-0