Electricity Reform in Europe

Electricity Reform in Europe

Towards a Single Energy Market

Edited by Jean-Michel Glachant and François Lévêque

The realisation of a European internal market for energy is still a work in progress. Written by leading European scholars and discussed with major energy stakeholders, this book presents a thorough analysis of the motives and methods needed to achieve a single European energy market.

Chapter 5: Ensuring EU Enlargement to New Member States

Christian Von Hirchhausen and Georg Zachmann

Subjects: economics and finance, competition policy, energy economics, industrial economics, public sector economics

Extract

1 Christian Von Hirschhausen and Georg Zachmann INTRODUCTION This chapter provides a survey of the main structures of the electricity sector in the East European new EU Member States (Poland, Czech Republic, Slovakia, Hungary, Lithuania, Latvia, Estonia, Slovenia) and candidate countries (Romania, Bulgaria, Croatia). The chapter’s focus is on benchmarking the reform process in the region using qualitative and quantitative ranking methods. It also discusses open policy issues regarding investment adequacy, fuel mix and interregional electricity trading. We establish that while all countries have implemented some reforms, most of the objectives stated in the Acceleration Directive 2003/55/EU are yet to be achieved. Among these are the creation of competitive national markets, a functioning wholesale market and efficient cross-border trade. EU electricity enlargement and the creation of a truly internal European market are far from being achieved. In May 2004 the EU integrated eight countries from Central and Eastern Europe, as well as Malta and Cyprus, into what is about to become a truly pan-European Union. But whereas the political EU enlargement is proceeding smoothly, electricity enlargement turns out to be a more complex undertaking, which is far from being achieved at present. Since the mid1990s, these countries have worked hard to bring their energy sectors in conformity with the EU acquis communautaire. The objective of this chapter is to provide a balanced assessment of this process up to the present, to identify successes and the challenges still lying ahead, and to derive therefrom policy recommendations on how to foster...

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