From 1999 to 2001, the golden era of the new, the EU market was integrated in the wholesale electricity. Things were so much simpler then. The incumbent utilities had separated their grid operations from their generation and supply businesses, following the first Internal Electricity Market (IEM) Directive in 1996.
The basic elements enabling competition and allowing trade in power to flourish across the continent were in place. Following 2003’s so-called ‘second package’ we felt that liberalisation would mature and furnish Europe with a stable market framework over the coming years.
Soon things became more complex and, by 2010, it was becoming harder to say that Europe’s wholesale electricity market was stable and strong. So, what do EU policymakers now need to concentrate on in the ‘Clean energy for all Europeans’ Package (CEP), if it is to make a successful contribution to re-establishing European electricity sector liberalisation?
Let’s ensure now that this fourth package of IEM legislation helps Europe revert to a truly level playing field in the power market.
The CEP must take a decisive step in remedying distortions caused by artificial privileges enjoyed by renewable electricity generators. Putting an end to priority dispatch, priority grid access and balance responsibility immunity in many member states need not endanger their business model. Any cost disadvantages from which renewable technology suffers as result can be compensated by continued financial support, granted according to auction results.
Second, let’s make the internal market truly European by treating both internal and cross-border transactions equally. Current transmission capacity calculation methodologies make it hard to determine the extent to which Transmission System Operators (TSOs) improperly restrict cross-border access to the market.
Read more on The Parliament Magazine.