The Dynamic Regulatory Process Towards a Single European Electricity Market

H. de Jong and R. Hakvoort (The Netherlands)


Power Market Deregulation, single European electricity market, regulatory process, electricity directive, comitology, market integration.


In the last decade, under the guidance of the European Commission, the European power sector was restructured in order to introduce competition in generation and supply. In this process at least three phases can be distinguished. The first phase was one of diplomacy, resulting in a common framework for liberalization of the then fifteen national electricity markets in Europe. This complex process yielded the first Electricity Directive (1996) focusing on organisational and legal issues. In order to reshape the economic design of the electricity market further regulation was however necessary. A negotiation process with stakeholders was initiated, the so-called Florence process. Despite the efforts of the Commission, the process basically failed, as Member States could not be enforced to implement the agreed on conclusions. The third phase was initiated in 2003 when the European Parliament approved of the second Electricity Directive and an accompanying Regulation authorizing the Commission to issue binding guidelines. This paper analyzes and discusses the process of electricity market restructuring in Europe from a regulatory and policy viewpoint.

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