European Energy Market After Deregulation: A Process of Limited Restructuring and the Role of European Competition Law

Abstract

The financial organisations engaged in the electricity and natural gas markets were forced to change, due to the deregulation process. The presence of new players in the markets and changes in demand obliged the existing companies to react. This reaction was not limited to an aggressive commercial policy towards new geographic markets but often acquired complex forms, especially in the electricity sector. We note that the electrical power and natural gas sector are not characterised by a dynamic increase of demand nor by new technological achievements, as is the case in the telecommunications sector for example. Indeed the enterprises engaged today in these markets existed before the deregulation. Only a small number of new undertakings entered the market. In spite of this, there was significant development in the market structure and the nature of traders. We could notice a restructuring of the markets and traders, a fact that is a positive step towards the realisation of the domestic market. Therefore, it is necessary to control these changes in order to avoid any incompatibility with the goals of European Competition Law. In other words it is a delimitated restructuring of energy markets which is subject to supervision. In this paper we firstly present the different aspects of this restructuring and second we highlight the existing restrictions on this process, while we often refer to specific cases of high importance for the European Energy Market. We note that this paper constitutes a part of a broader research paper on the interaction between European Competition Law and Energy Market Regulation.