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The European Single Market in Electricity: An Economic Assessment

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Abstract

The European single market in electricity has been promoted vigorously by the European Commission since 1996. We discuss how national electricity markets and cross border electricity markets have been reshaped by the process. We examine the Commission’s own work on evaluating the benefits of the single market. We look at the wider evidence of impact on prices, security of supply, the environment and on innovation. We conclude that the institutional changes are extensive and there has been significant market harmonisation and integration. However, the measured benefits are difficult to identify, but likely to be small. This is partly because over the same period there has been a large rise in subsidised renewable generation driven by the decarbonisation agenda.

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  • Pollitt, M., 2018. "The European Single Market in Electricity: An Economic Assessment," Cambridge Working Papers in Economics 1832, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1832
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    9. Montoya, L.G. & Guo, B. & Newbery, D. & Dodds, P.E. & Lipman, G. & Castagneto Gissey, G., 2020. "Measuring inefficiency in international electricity trading," Energy Policy, Elsevier, vol. 143(C).
    10. San Juan, Carlos & Armario Benitez, Julia I., 2020. "Land, water and energy: the crossing of governance," UC3M Working papers. Economics 31463, Universidad Carlos III de Madrid. Departamento de Economía.
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    15. Yu Hu & David Soler Soneira & Mar'ia Jes'us S'anchez, 2020. "Barriers to grid-connected battery systems: Evidence from the Spanish electricity market," Papers 2007.00486, arXiv.org, revised Nov 2020.
    16. Finn Roar Aune & Rolf Golombek, 2020. "Are carbon prices redundant in the 2030 EU climate and energy policy package?," Discussion Papers 940, Statistics Norway, Research Department.
    17. Cassetta, Ernesto & Nava, Consuelo R. & Zoia, Maria Grazia, 2022. "A three-step procedure to investigate the convergence of electricity and natural gas prices in the European Union," Energy Economics, Elsevier, vol. 105(C).
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    Keywords

    electricity single market; decarbonisation;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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