The future of common electricity market in Europe

The common electricity market in Europe according to CEE & SEE Countries Renewable Energy Market: Outlooks 2015÷2025 cross-border electricity trade among European countries you may understand better when reading further this article.

Energy is a fundamental input to economic activity, and thus to human welfare and progress. Historically, energy costs have steadily declined, which means that tasks that were previously performed by people could be performed by machines and become increasingly automated. Competitiveness is not only a matter of cost but also of value for consumers and society. Today’s energy systems help create added value for consumers through their overall reliability and efficiency.

The management of energy costs is also a key competitive issue for businesses, particularly those exposed to international competition. The cost of electricity and heating is often also an essential part of the cost of living. It is, therefore, important to offer affordable energy prices to consumers. Neither should we underestimate the significance of energy costs for many public services, such as health care facilities and public sports grounds. Overall energy costs must be as low as possible, given the available resources.

Competitive energy markets benefit society by eliminating excess capacity and pushing down operating and maintenance costs. Much of the old generation production capacity in Europe needs to be replaced in the coming decades. Market competition will ensure that investments in new capacity are cost-effective – to the benefit of society, consumers and, of course, the environment. Protecting the environment costs money and, since public resources are limited, measures should be as cost-effective as possible.

Consideration of the climate and environment is something the energy system must be equipped to deliver on. Two overall goals must be addressed – environmental targets and sustainability targets. Emissions rights trading is one example of how market-based instruments help stimulate investment in production methods that emit low levels of CO2. Other methods include the increased usage of coal power with Carbon Capture and Storage (CCS).

On the other hand, feed-in tariffs guarantee producers of renewable electricity a certain amount of compensation for each MWh of renewable electricity they feed into the grid. This is paid by the network company, which charges this cost to consumers.

To meet these two important targets, we need a well-developed infrastructure. In terms of infrastructure for electricity, gas and heat, this involves the local environment's impact – such as constructing power lines and pipelines – and minimizing transmission losses. Quite often, remote (e.g., offshore) locations are those best suited for renewable energy production. In the absence of an expanded grid, it will be impossible to transport electricity produced in these locations to consumers.