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Progress towards Completing the Internal Energy Market – 2014

Important progress is being achieved in completing the internal energy market according to the European Commission's Internal Energy Market progress report adopted on 13 October 2014. The package not only takes stock of the main achievements and outstanding challenges, but also reports on the trends and developments of the developing EU Energy Markets. Moreover, detailed analyses have been carried and published in separate reports on investments, unbundling and enforcement. Finally, 28 country-specific reports have been adopted containing individual assessments of the state of the energy markets in the Member States.

Success of current policies

Energy market integration in the EU has delivered many positive results already:

  • wholesale electricity prices declined by one-third and wholesale gas prices remained stable between 2008 and 2012
  • consumers have more choice when it comes to picking an energy supplier
  • many missing infrastructure links between EU countries have been built or are under construction
  • cross-border trade in gas and electricity between EU countries has increased. Gas pipelines are also being used more efficiently thanks to common rules on the use of gas networks
  • EU legislation makes sure that energy companies cannot exclude competitors from access to pipelines or withhold the construction of important infrastructure. EU rules also guarantee fair trading on wholesale markets and prevent price manipulation.

What still needs to be done

But to complete the internal energy market, further steps need to be taken and new challenges need to be addressed together. In particular:

  • more investments in infrastructure including smart grids. In gas, these investments should focus on ending the isolation of the Baltic States and diversifying suppliers for countries in Eastern Europe. In electricity, investments should focus on linking the grids of the Iberian Peninsula, the Baltic region, and Ireland and the United Kingdom. By 2020, three quarters of the EU's infrastructure projects of common interest should be completed
  • the implementation of a set of simple, harmonised rules across Europe for gas and electricity trading
  • government intervention should only happen when secure energy flows cannot be guaranteed by the market
  • a stronger emphasis on regional cooperation to bring faster results and to better address local needs
  • consumers should become more active players in the energy market (i.e. through smart meters that allow them to monitor and adjust their energy consumption)
  • retail and wholesale markets should be better linked so that lower wholesale prices lead to lower consumer prices.

Related documents

Pilot project for joint electricity trading leads the Internal Energy Market 2014 to progress

Grid operators and power exchanges from 14 EU Member States (Belgium, Denmark, Estonia, Finland, France, Germany, Austria, UK, Latvia, Lithuania, Luxembourg, the Netherlands, Poland and Sweden) plus Norway inaugurated on February 4 a pilot project for joint electricity trading, so-called day-ahead market coupling. The project, which is a milestone on the way towards a European Electricity Market, had been jointly initiated by the EU Commission, regulators, grid operators and power exchanges in North-Western Europe (NWE). NWE market coupling combines all bids and offers in a region and creates a large integrated electricity market in the area concerned, combining 75% of today's electricity consumption in the EU. The Commission prepares an EU Regulation that will make market coupling binding in the entire EU, leading to important costs savings for the benefit of European customers. Read more: http://europa.eu/rapid/press-release_MEX-14-0204_en.htm

Guidance to Member States on state intervention in electricity markets

5 November 2013. In some cases, state intervention in energy markets may be necessary in order to ensure security of supply and to achieve climate objectives. To avoid adding extra costs for consumers and distorting the functioning of the internal electricity market, public intervention has to be designed with great care.

The Commission gives guidance to Member States on how to:

  • design and reform national support schemes for renewables. As technologies mature, renewables should gradually be exposed to market prices and eventually support must be fully removed.
  • design adequate generation capacities to ensure the continuous supply of electricity when generation fluctuates, for instance due to changing weather conditions. This has to be done without jeopardising the benefits the EU-wide market offers. The Commission provides a checklist which allows governments to verify the efficiency of their intervention and to improve it where necessary.
  • enhance the role of consumers in the electricity market by providing them with incentives to use electricity when it is cheapest and most plentiful. Consumers can contribute to ensuring sufficient energy flow at peak times and this will help to avoid costly investments in new power plants.

Related documents

Staff Working Documents

Press material

It's time to complete the internal energy market

On 15 November 2012, the European Commission presented a Communication assessing the state of play of the internal energy market, to be completed by 2014.

The Communication encourages Member States to step up efforts, highlighting the benefits of a truly integrated European market for citizens and business. The document also identifies the need for further action in a number of areas including consumer protection, enforcing the existing rules and investing in the modernisation of energy infrastructure.

The Commission will work with Member States to empower consumers and to phase out state interventions which distort markets.

Press room

Public consultation

Together with the Communication, we are launching a Public Consultation on delivering a more coordinated approach to generation adequacy and security of supply in the internal electricity market and ensuring that any state interventions in this regard are well designed and effective.

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