A Cross-country Comparison
Edited by Jean-Michael Glachant and Dominique Finon
Chapter 1: The Making of Competitive Electricity Markets in Europe: No Single Way and No ‘Single Market’
Jean-Michel Glachant INTRODUCTION Competitive reforms are causing an unprecedented shake-up of the European electricity market, aﬀecting not only the 15 countries of the European Union (EU), but extending beyond them to nations like Norway and Switzerland, as well as to applicants for membership in the EU (Poland, Hungary, the Czech Republic, and so on). During the second half of 1996, adoption of Directive 96/92 on the creation of an ‘internal market for electricity’ marked a turning point in energy sector liberalization policies in Europe. Previous to that, competitive reform of electricity had only begun in a handful of countries: Great Britain and Norway in the early 1990s, and Finland and Sweden in 1995 and 1996. With the entry into force of this directive in February 1999, and parallel movements in Norway and Switzerland as well as in the applicants, a group of 20 countries are now simultaneously opening their electricity sectors to competition. This incipient European market represents nearly 3000 TWh in potential consumption – almost six times that of Germany – with approximately 450 million domestic consumers. What is the shape of this new competitive electricity sector? Is there convergence towards a single model or, conversely, does a signiﬁcant diversity persist? What structural changes were catalysed by electricity market liberalization in Europe? In fact, ﬁve years after adoption of Directive 96/92, the European ‘internal market’ for electricity is neither uniﬁed nor uniform. Even within the EU, each country appears to be cultivating its own preferred variant on the...
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