EPRS Admin By / October 20, 2021

Evolution of prices and convergence in the electricity sector

Evolution of prices and convergence in the gas sector (2012-2020)

Evolution of prices and convergence in the gas sector (2012-2020)

In the electricity sector, the study estimated that ambitious action to integrate the market could deliver benefits of up to €40 billion per year by 2030. This could be reduced by up to €7.5 billion if the increment in transmission capacity is only half of what is optimal. A reduction in benefit of €5 billion would apply if cooperation is not optimal and if some Member States seek to achieve more security of supply at a national level. Some increase in benefits in the order of up to €0.5 billion could come from sharing balancing reserves and gains of up to €5 billion could come from using smart grids to facilitate demand side response. Taking all these elements into account, a reasonable amount of €33 billion per year by 2030 could still be expected as a result of further integration in this sector. Looking at changes in the integration of the EU electricity sector since 2015 using the dispersion of electricity prices between Member States as a proxy indicator, one could see that after the progress made from 2012 to 2015, progress since then has been modest (see Figure 9). It is therefore assumed that the total amount of €33 billion to be realised progressively until 2030 could be discounted by half the amount corresponding to the linear evolution from 2015 to 2020, representing €5.5 billion. Consequently, it is concluded that around €27.5 billion of benefits per year could still be progressively achieved in this area. As no estimation is available beyond 2030, it is assumed that this amount also corresponds to the long term benefit .

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