Skip to main content
SpringerLink
Log in

The Development of Energy Markets in Europe

  • Chapter
  • First Online:
Financial Aspects in Energy

Abstract

Europe has been engaged in a debate aimed at building an integrated and competitive energy market since the early 1990s. The European Union has instituted to share the responsibility to develop a strategic policy to change current trends, and hence a truly competitive, single European electricity and gas market is expected to open the competition of Europe-wide companies. In this vain, the aim of this chapter is to analyze the developments of European energy markets and regional markets in accordance to the market efficiency criteria and financial aspects of energy. Despite the physical, economic, and political barriers, the number of financial players participating in these markets is continuously increasing and a considerable success has been achieved for efficiency of the markets. However, 10 years after the Lisbon Treaty, the European energy markets are significantly far from the unique energy market goal. Moreover, in Europe’s energy market there are serious malfunctions causing moves to regional fragmentation. Generally, it is agreed that the future structure of the European energy market has not been yet clearly defined.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    U.S. experience is entirely sourced by economic reasons and has never enacted a mandatory comprehensive federal restructuring and competition law, leaving the most significant reform decisions to the states under the politics of de-regulation (Joskow 2008).

  2. 2.

    Germany and the Netherlands have persuaded mergers; the Netherlands, Estonia, Austria, and Czech Republic have oligopolies that control more than 70% of the market. Portugal and France have supported the concept of national champions (Haas et al. 2006).

References

  • Amundsen ES, Bergman L (2006) Why has the Nordic electricity market worked so well? Utilities Policy 14(3):148–157

    Article  Google Scholar 

  • Barroso JM (2006) The EU and energy: looking to the future. EU Focus September 1–3

    Google Scholar 

  • Barthe F (2005) Deregulation and opening of the electricity market in France. In: 18th international conference on electric distribution, Turin, June 6–9

    Google Scholar 

  • Belkin P (2008) The EU’s energy security challenges’ CSR report for congress, Resource document. http://www.fas.org/sgp/crs/row/RL33636.pdf. Accessed 10 April 2010

  • CEER and ERGEG (2009) European energy regulators’ news. November Resource document. http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/NEWSLETTERS/June%202009. Accessed 5 March 2010

  • Christopoulos AG, Mylonakis J, Francis T (2008) The deregulation process of electricity and gas markets in the European Union and the influence of energy prices on inflation. Eur J Sci Res 19(4):844–859

    Google Scholar 

  • DaSilva PP, Soares I (2008) EU spot prices and industry structure: assessing electricity market integration. Int J Energy Sector Manag 2(3):340–350

    Article  Google Scholar 

  • De Jong HM, Hakvoort RA (2008) European electricity market integration: an analysis of the European governance dynamics. In: Proceedings of the 31st IAEE international conference: bridging energy supply and demand: logistics, competition and environment, Istanbul, Turkey, pp 1–26

    Google Scholar 

  • Delgado J (2008) European energy markets: moving in a common direction. In: Gnan E, Gudmundsson M (eds) Commodities, Energy and Finance. SUERF/OeNB, Vienna, pp 41–52

    Google Scholar 

  • Domanico F (2007) Concentration in the European electricity industry: the internal market as solution? Energy Policy 35(10):5064–5076

    Article  Google Scholar 

  • Eikeland OP (2008) EU internal energy market policy: new dynamics in the Brussels policy game? CANES working paper

    Google Scholar 

  • Ernst and Young (2006) Final report research project: the case for liberalisation, Resource document. http://www.dti.gov.uk/files/file28401.pdf. Accessed 15 February 2010

  • EURELECTRIC report on regulatory models in a liberalized European Electrictiy Market (2004) EURELECTRIC SG Regulatory Models, Brussels, ref: 2004-030-0052

    Google Scholar 

  • European Commission (2007a) Energy sector inquiry report, Resource document. http://ec.europa.eu/competition/sectors/energy/inquiry/. Accessed 11 February 2010

  • European Commission (2007b) Energy sector competition inquiry. http://ec.europa.eu/competition/antitrust/others/sector_inquiries/energy/

  • European Commission (2008) Second strategic energy review: an EU energy security and solidarity action plan, COM/2008/0781 final

    Google Scholar 

  • European Commission (2009) Progress in creating the internal gas and electricity market. DG Tren Staff Working Document Report, SEC 287

    Google Scholar 

  • European Commission (2010a) Report on progress in creating the internal gas and electricity market, communication from the Commission to the Council and the European Parliament SEC 251

    Google Scholar 

  • European Commission (2010b) From regional markets to a single European market, prepared by Everis and Mercados EMI

    Google Scholar 

  • European Commission DG TREN (2008) Review and analysis of EU wholesale energy markets, prepared by ECORYS Nederland BV

    Google Scholar 

  • Fiorio CV, Florio M, Doronzo R (2007) The electricity industry reform paradigm in the EU: testing the impact on consumers. Consumers and utility reforms in the EU conference, Milan, June 8–9

    Google Scholar 

  • Growitsch S, Nepal R, Stronzik C (2009) Der Deutsche Gasgroßhandel – Marktgebiete und Marktintegration. WIK Newsl 75:23–42

    Google Scholar 

  • Haas R, Glachant JM, Keseric N, Perez Y (2006) Competition in the continental European electricity market: despair or work in progress? In: Sioshansi F, Pfaffenberger W (eds) Electricity market reform: an international perspective. Elsevier, Amsterdam

    Google Scholar 

  • Haase N (2008) European gas market liberalization: are regulatory regimes moving towards convergence? Oxford Institute for Energy Studies, NG 24

    Google Scholar 

  • Harris N, Jackson M (2005) A picture of European gas trading market in 2005. Pipeline Gas J 232(8):54–58

    Google Scholar 

  • Hattori T, Tsutsui M (2004) Economic impact of regulatory reforms in the electricity supply industry: a panel data analysis for OECD countries. Energy Policy 32(6):823–832

    Article  Google Scholar 

  • International Confederation of Energy Regulators (ICER) (2010) A description of current regulatory practices for the promotion of energy efficiency. Energy efficiency report, June

    Google Scholar 

  • International Energy Agency (2008) World Energy Outlook 2008

    Google Scholar 

  • International Energy Agency (2009) Energy policies of Spain, Resource document. http://www.iea.org/Textbase/npsum/spain2009SUM.pdf. Accessed 21 January 2010

  • Jamasb T, Pollitt M (2005) Electricity market reform in the EU: review of progress toward liberalization & integration. Energy J 26(Special I):11–42

    Google Scholar 

  • Johannsen KS, Pedersen LH, Sørensen EM (2004) Independent regulatory authorities – a comparative study of European Energy Regulators. AKF Forlaget, Copenhagen

    Google Scholar 

  • Joskow P (2008) Lessons learned from electricity market liberalization. Energy J 29(Special II):9–42

    Google Scholar 

  • Kaderják P (2005) A comparison of electricity market models of CEE new member states. Ensuring sustainable electricity enlargement, SESSA working paper 14

    Google Scholar 

  • Kroes N (2007) Improving Europe’s energy markets through more competition, European Commissioner for competition policy, Resource document. http://europa.eu/rapid/press Releases Action.do?reference=SPEECH/07/175&format=HTML&aged=0&language=EN&guiLanguage=en. Accessed 22 January 2010

  • Larsen A, Pedersen LH, Soensen EM, Olsen OJ (2006) Independent regulatory authorities in European electricity markets. Energy Policy 34:2858–2870

    Article  Google Scholar 

  • Littlechild S (2006) Competition and contracts in the Nordic residential electricity markets. Utilities Policy 14(3):135–147

    Article  Google Scholar 

  • Majstrovic G, Bajs D, Sutlovic E (2008) Correlation and regression of wholesale electricity market daily prices in Europe. Int Rev Electr Eng 3(4):699–708

    Google Scholar 

  • Meeus L, Belmans R (2008) Electricity market integration in Europe. Revue E_124(1)-2008

    Google Scholar 

  • OFGEM (2009) Energy protecting consumer interests: now and for the future. Annual report 2008–2009, 82/09

    Google Scholar 

  • OXERA (2007) Energy market competition in EU and G7: forward projections, 2007–11. Prepared for Department for Business, Enterprise and Regulatory Reform

    Google Scholar 

  • Pollitt MG (2009a) Electricity liberalization in the EU: a progress report. University of Cambridge, working paper in economics, 0953

    Google Scholar 

  • Pollitt MG (2009b) Evaluating the evidence on electricity reform: lessons for the South East Europe (SEE) market. Utilities Policy 17(1):13–23

    Article  Google Scholar 

  • Rademaekers K, Slingenberg A, Morsy S (2008) Review and analysis of EU wholesale energy markets. EC DG TREN, ECORYS Nederland BV, Rotterdam

    Google Scholar 

  • Rademaekers K, Slingenberg A, Morsy S (2008) Review and analysis of EU wholesale energy markets. ECORYS Netherlands, EU DG TREN Final Report

    Google Scholar 

  • Schneider V, Jäger A (2003) The privatization of infrastructures in the theory of the state: an empirical overview and a discussion of competing theoretical explanations. In: E Wubben FM, Hulsink W (eds) On creating competition and strategic restructuring. Edward Elgar, Cheltenham, UK, pp 101–137

    Google Scholar 

  • Schwark B (2006) Important New Nodes; Gas Hubs and their Impact on Competition, MIR Network Industries Quarterly, December 2006

    Google Scholar 

  • Serrallés R (2006) Electric energy restructuring in the EU: integration, subsidiarity and the challenge of harmonization. Energy Policy 34(16):2542–2551

    Article  Google Scholar 

  • Sioshansi FP (2006) Electricity market reform: what have we learned? what have we gained? Electr J 19(9):70–83

    Article  Google Scholar 

  • Steiner F (2001) Regulation, industry structure and performance in the electricity supply industry. OECD Econ Stud 32(1):143–182

    Article  Google Scholar 

  • Van Damme E (2005) Liberalizing the Dutch Electricity Market: 1998–2004. TILEC Discussing Paper, DP 009

    Google Scholar 

  • Vasconcelos J (2009) Energy regulation in Europe: regulatory politics and politics of regulation. Eur Rev Energy Market 3(3):1–11

    Google Scholar 

  • Wölfl A, Wanner I, Kozluk T, Nicoletti G (2009) Ten years of product market, reform in OECD countries: insights from a revised PMR, indicator. OECD Economics Department Working Papers, 695, 10.1787/224255001640

  • Woo CK, Lloyd D, Tishler A (2003) Electricity market reform failures: UK, Norway, Alberta and California. Energy Policy 31(11):1103–1115

    Article  Google Scholar 

  • Yang H, Liu S, Zhang Y, Luo W (2009) Empirical Research on Efficiency of the Electricity Futures Market. Int J Emerg Electr Power Syst 10(2):1–15

    Google Scholar 

  • Zachmann G (2008) Convergence of electricity wholesale prices in Europe? – a Kalman Filter Approach. Energy Econ 30(4):1659–1671

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Hacettepe University, Ankara, Turkey

    Mehmet Baha Karan & Hasan Kazdağli

Authors
  1. Mehmet Baha Karan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Hasan Kazdağli
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Mehmet Baha Karan .

Editor information

Editors and Affiliations

  1. , Finance, VU University Amsterdam, De Boelelaan 1105, Amsterdam, 1081 HV, Netherlands

    André Dorsman

  2. , Economics, Econometrics and Finance, University of Groningen, Nettelbosje 2, Groningen, 9747 AE, Groningen, Netherlands

    Wim Westerman

  3. , Business Administration, Hacettepe University, Beytepe Campus, Ankara, 06800, Turkey

    Mehmet Baha Karan

  4. , Business Administration, Hacettepe University, Beytepe Campus, Ankara, 06800, Turkey

    Özgür Arslan

Rights and permissions

Reprints and permissions

Copyright information

© 2011 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Karan, M.B., Kazdağli, H. (2011). The Development of Energy Markets in Europe. In: Dorsman, A., Westerman, W., Karan, M., Arslan, Ö. (eds) Financial Aspects in Energy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-19709-3_2

Download citation

  • DOI: https://doi.org/10.1007/978-3-642-19709-3_2

  • Published:

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-19708-6

  • Online ISBN: 978-3-642-19709-3

  • eBook Packages: Business and EconomicsEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation