An integrated EU energy market is the most cost-effective way to ensure secure and affordable supplies to EU citizens. Through common energy market rules and cross-border infrastructure, energy can be produced in one EU country and delivered to consumers in another. This keeps prices in check by creating competition and allowing consumers to choose energy suppliers.
Recasting the design of the EU electricity market to make it fit for the clean energy transition is a major element in the Clean energy for all Europeans package. This comprised updating the Electricity Directive (2009/72/EC) and the Electricity Regulation ((EC)714/2009), introducing a new Risk Preparedness Regulation and enhancing the role of the Agency for the Cooperation of Energy Regulators (ACER).
These changes followed on from the important steps introduced in the 2009 Third Energy package, which improved the functioning of the EU energy market and brought tangible progress for consumers. Addressing both the electricity and gas markets, these policy changes provided for the unbundling of energy suppliers from network operators and increasing cross-border cooperation, for example by creating the European Networks for Transmission System Operators and ACER. More about the energy market legislation.
Energy consumer rights
The EU has issued a broad range of energy consumer rights to better protect and empower consumers.
By making energy bills easier to read and introducing smart technologies, consumers can make more informed decisions that will help them save energy and money. These rights need to be clearly defined in national law and must follow provisions in EU legislation.
Wholesale markets for gas and electricity
Energy is often bought and sold on wholesale markets before reaching the final consumer. To ensure the smooth functioning of these markets and prevent price manipulation, the EU has enacted regulations which prohibit the use of insider information or the spreading of incorrect information concerning supply, demand, and prices.
The EU also passes rules on the use of cross-border energy networks. Known as network codes for gas and network codes for electricity, these rules regulate who can use cross-border infrastructure and under what conditions. The EU has also established the European Gas Regulatory Forum, also known as the Madrid Forum, which meets once or twice a year to discuss the creation of the internal gas market and on decarbonising the European gas industry.
While access to infrastructure must generally be granted to energy companies on a non-discriminatory basis, in certain circumstances new infrastructure may be exempt from this rule. This may be necessary to implement particularly risky investments which could not be made otherwise. These exemptions are always linked to strict conditions set out by the European Commission.
Smart grids and meters
Smart grids are energy networks that can automatically monitor energy flows and adjust to changes in energy supply and demand accordingly.
When smart grids are coupled with smart metering systems, smart grids reach consumers and suppliers by providing information on real-time consumption.
Taxes on energy products like electricity, gas and oil vary between industries and households across the EU. Significantly, Member States set different rates, reductions and exemptions, which has an ensuing effect on consumption and investment patterns, the type of energy consumed and their use.
Sometimes government intervention in the energy market may be necessary to realise specific policy objectives.
The EU has issued guidance on government intervention designed to support the availability of adequate electricity in the system known as capacity mechanisms.
Single market progress
On 11 April 2019, the European Council (Article 50) decided, in agreement with the United Kingdom, to extend further the two-year period provided for by Article 50(3) of the Treaty on the European Union, until 31 October 2019. Following this decision, and until further notice, any reference in the documents published on this page to 30 March 2019 at 00.00 (CET) or 13 April 2019 at 00.00 (CET) as the withdrawal date of the United Kingdom from the European Union, must be read as referring to 1 November 2019 at 00.00 (CET). Please note that:
(i) in the event that the United Kingdom has not held elections to the European Parliament in accordance with applicable Union law and has not ratified the Withdrawal Agreement by 22 May 2019, the Decision referred to above shall cease to apply on 31 May 2019, and the withdrawal will therefore take place on 1 June 2019; and
(ii) should the United Kingdom ratify the Withdrawal Agreement at any stage before 31 October 2019, the withdrawal will take place on the first day of the month following the completion of the ratification procedures.
- Electricity Directive (2009/72/EC)
- Natural Gas Directive (2009/73/EC)
- Regulation Establishing an Agency for the Cooperation of Energy Regulators (EC) No 713/2009
- Electricity Regulation (EC) No 714/2009
- Natural Gas Transmission Networks Regulation (EC) No 715/2009