EU Electricity Market in Context of EU Competitiveness

The article deals with electricity industry reform in the European Union. The pros and cons of the electricity market liberalization in the context of EU competitiveness are being argued. The liberalization of the electricity industry raises social costs above social benefits. Due to the market failure the electricity market is unable to allocate resources properly. The possible risks of liberalization are underestimated. We are facing nobody's responsibility for the reliable functioning of the whole electricity industry. To ensure the long term reliability in electricity supply, the coordinated regulatory approach is needed. In our opinion, it is necessary to ensure the coordinated development of generation, transmission and distribution capacities.