Single European Electricity Market and the Role of RES-E: The Cases of Austria, Finland, and the Czech Republic

Abstract

The European Union plans to achieve fully liberalized internal electricity markets by 2014. Achieving this ambitious goal is strongly dependent on two factors: national energy policies and transmission networks. The current work focuses on the national policies of three EU states across three electricity market regions (Central-East, Central-South, and Nordic) and assesses their compliance against the objective of common European electricity market. To achieve our objective two approaches are utilized. First, we review the development of electricity markets in the sampled countries and focus on renewable energy policy. This approach enables understanding of national markets’ differences in respect of electricity generation mix, electricity supply and demand structures, and various support mechanisms for conventional and RES electricity generation technologies. Second, we classify each of the countries’ electricity market according to two dimensions (Finon, et al., 2004) - governance dimension (competition/coordination) and technology dimensions (large scale centralized/small scale decentralized systems). The results show how the national energy policies create different market conditions for RES-E generators which may in consequence hinder the process of achieving the pan-European electricity market.