Towards a common European electricity market

This paper analyses the future organization of cross border trade in the European electricity market. The draft Regulation “on Conditions for Access to the Network for Cross-Border Exchanges in Electricity” issued in March 2001 by the European Commission together with related documents produced by the European association of Transmission System Operators (ETSO) and the Council of European Electricity Regulators (CEER) constitute the backbone of this analysis. The paper examines whether the economic principles contained in these documents suffice to design a working European electricity market and if not, what is missing. It concludes that these principles need to be completed by harder measures in order to induce the “real integrated single market” of electricity claimed by the Commission. In short, the principles may be necessary, but they are unlikely to be sufficient.