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An assessment of the European electricity market reform options and a pragmatic proposal

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  • Chaves, J. P.
  • Cossent, R.
  • Gómez San Román, T.
  • Linares, P.
  • Rivier, M.

Abstract

The current European energy crisis, caused to a large extent by the unlawful invasion of Ukraine by Russia, has renewed calls for a deep reform of the European electricity market. In this paper, we look at the alternatives proposed for the reform of the European electricity market, analysing their advantages and disadvantages, and we put forward a specific proposal for the reform. We focus mostly on measures directed at the wholesale generation market, although we also propose some changes that we believe will also be needed at the retail level. Emergency measures to tackle the current energy crisis, which are not necessarily consistent with the long-term reform and should definitely not determine the long-term design of the European electricity market, are very briefly assessed in an annex, including their compatibility with this long-term reform.

Suggested Citation

  • Chaves, J. P. & Cossent, R. & Gómez San Román, T. & Linares, P. & Rivier, M., 2023. "An assessment of the European electricity market reform options and a pragmatic proposal," Cambridge Working Papers in Economics 2325, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2325
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    More about this item

    Keywords

    Electricity market; energy transition; renewables;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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