Homework

Homework

Q 1:

With Europe's current trend in electricity consumption, large investments in new capacity are required. An alternative, with positive impact on economy and environment, is a step increase in energy decency. Liberalization of the electricity market is presented by the European Commission as a means for reducing electricity prices, securing supply, improving decency and developing renewable energy production. Industries and private households are in theory able to freely choose their energy supplier following the entry into force of EU directives in 2004 and 2007, but many obstacles remain, with a single European energy market still far from reality. To make up for the shortcomings, the European Commission has made further legislative proposals, including controversial plans to separate the production and distribution arms of large integrated energy firms such as France's EDF and Germany's E.ON. The first electricity and gas directives were adopted in the late 1990s, with the objective of opening up the electricity and gas markets by gradually introducing competition. The Commission has consistently argued that liberalisation increases the efficiency of the energy sector and the competitiveness of the European economy as a whole. But a number of stakeholders and member states, notably France and Germany, vehemently disagree with this assessment. While most member states had implemented the electricity and gas directives by September 2000, a 2001 Commission inquiry concluded that further measures were necessary in order to complete the internal energy market and to reap its benefits.

Q 2:

The electricity and gas market are experiencing since the second half of the Nineties a wide and complex liberalization process across Europe. The European Directives and the national plans have designed a common path for energy markets built on the principles of Third Party Access to the transport networks, of unbundling of the incumbent activities and of demand. Several key points ...