Updated on 21 November 2012
In order to liberalise the EU internal energy market, three legislative packages were adopted from 1996 to 2009. As a consequence, new gas and electricity suppliers can enter markets across the EU while consumers are free to choose their energy supplier.
The ‘third energy package‘ (directives 2009/72 (electricity) and 2009/73 (gas)) came into force in March 2011. It was adopted in 2009 to prevent energy company monopolies by separating energy production from transmission activities (“ownership unbundling”). The monitoring of transposition and implementation in the Member States shows that there are serious delays in this process. There are additional concerns that investments in energy infrastructure, in particular interconnectors, are insufficient.
As many obstacles remain before the internal energy market is fully functional, the Commission published a review of the progress to date on the 15 November 2012. EU leaders did, in February 2011 and in June 2012, emphasise the importance of completing the internal energy market by 2014. Further market liberalisation and interconnection of electric grids and pipelines would allow Member States to trade energy more flexibly than at present. This would reduce the impact of energy supply interruptions and dependence on single suppliers. The Communication ‘Making the internal energy market work’ assesses the progress made so far regarding harmonisation of market rules and network operations rules for electricity and gas. It warns that the EU is likely to miss its 2012 deadline for the completion of the internal energy market. These issues are closely related to the ‘energy infrastructure package‘ and EU rules on competition and state aid in the energy sector. The Energy Roadmap 2050 has also considered the role of the internal energy market in achieving the energy decarbonisation objectives.
Overviews / news items
Communication on the internal energy market: roadmap / DG Energy, October 2011
The internal energy market – time to switch into higher gear: non-paper / DG Energy, Februay 2011
Analysis – general
The EU’s policy to finalise the internal electricity market: an initiative of the Commission based on false assumptions? / Thomas Sattich. Stiftung Wissenschaft und Politik, 2012
Policy brief on why the electricity market remains fractured and weak despite the efforts of the Commission to complete the internal energy market.
Far from completion?: prospects for development of the EU energy market / Artur Lorkowski. Demos Europa, June 2012
Briefing note discussing the importance of completion of the internal energy market and its implications for the future.
Renewables and the EU internal electricity market: the case for an arranged marriage / Centre for European Policy Studies (CEPS), 2012
This CEPS policy brief argues that pursuing the renewables objective could contribute to the completion of the internal electricity market, help to overcome opposition to transmission projects and decrease the market power of incumbents.
Time to act: the case for developing Europe’s Single Electricity Market / Chiorean-Sime, Serban. European Policy Centre (EPC), December 2011
EPC policy brief on the state of play for the EU internal energy market.
Implementation / transposition of the ‘third energy package’
‘Energy Markets in the European Union in 2011’, SWD(2012)368, 15.11.12;
Brussels braced for energy liberalisation backlash / Euractiv Special report, 21.6.2012
EU energy markets in gas and electricity state of play of implementation and transposition / Altmann, Matthias. European Parliament. Policy Department A , 2010
The present study assesses the opening and completion of the internal energy market through stocktaking of the current status and a critical assessment of the likely policy challenges ahead.
Latest annual benchmarking report on implementation / DG Energy:
– 2009-2010 Report on progress in creating the Internal Gas and Electricity Market, 9.6.2011
– technical annex
Completing the internal electricity market by 2014: the challenges for Europe’s transmission system: annual report 2011 / ENTSO-E, 2012
This report emphasises TSOs’ (transmission system operators) efforts in contributing to the completion of internal electricity market by 2014.
– Ten-Year Network Development Plan 2012 (TYNDP)
Energy infrastructure priorities: briefing paper / Altmann, Matthias. Policy Department A, 2011
Energy infrastructure priorities are made on the basis of long-term energy models with underlying assumptions influencing the model results. This briefing paper analyses long-term assumptions up to 2050.
Green, safe, cheap: where next for EU energy policy? / Barysch, Katinka. Centre for European Reform (CER), 2011
European energy policy has become an area of huge complexity. The interests of various players – the European Commission, national governments and regulators, energy companies, consumers and business – are not always aligned. This report shows how EU energy policy is torn between short-term imperatives and the need to set a long-term framework.
– 4. The energy infrastructure challenge / Christof van Agt , p.27
– 8. Renewables in a single EU electricity market / Georg Zachmann, p.65
Energy infrastructure: priorities for 2020 and beyond – a blueprint for an integrated European energy network / European Commission. DG Energy, 2011