Political framework conditions for a deregulated electricity market

Europe is about to develop a model for deregulating the energy markets for electricity and gas which will be unique in the world. This model, which is the outcome of the joint efforts of the Commission, Parliament, and Council, is based on competition within a clearly defined regulatory framework, underlines the aspect of continuity of supply, and is going to result in higher efficiency and in benefits to the consumer. The three most important provisions of the new legislative package cover opening of the markets, - regulations about access to the grid, and - deregulation of grid operation ("unbundling"). Another important aspect is the continuity of supply, which depends critically on the existence of sufficient generating capacities. The current scenario of the development of energy consumption as regularly compiled by the European Commission is based on a 38 % growth of electricity consumption for the EU of 25 member countries in the period between 2000 and 2020. In addition, major investments must be made into plant replacement. A large share of the investments will be for conventional power plants. Maintaining the broadest possible diversification of primary energy sources will continue to be one of the overriding objectives of the EU Commission. The power industry is an important sector of the European economy, generating annual sales of 250 billion euro. It constitutes a major component of industrial competitiveness. The European Commission is confident that the European vendors of power plants will occupy front line positions when the wave of new investments into the electricity sector will start.