Germany's energy transition, the internal electricity market and Europe's future energy system

The neglect of Europe's Internal Electricity Market in the public debate on Germany's 'Energiewende' (energy transition) is surprising, given its role as the main transit country for electricity in Europe. The transformation of the country's energy sector will further exacerbate network fluctuations and intensify the need for modifications in Europe's power system. Cross-border power transfers will have to increase in order to overcome national limitations on absorbing large volumes of intermittent renewables like wind and solar power. As the Nordic power market demonstrates, only a truly integrated, supranational electricity market can provide the capacity needed for synergetic interaction of diverse national power systems. In order to establish such an infrastructure on a European scale, the energy transition needs to be guided by an economic approach designed to prevent further fractures in the Internal Electricity Market. Moreover, constructive negotiations with neighbouring countries on market designs and price signals will be important preconditions for a successful 'Energiewende' in Europe