The strategy pursued by the European Commission for the construction of a unified electricity market appears to be based on two pillars: the liberalization of individual national markets combined with their greater integration. According to the latest data released by the Commission, the integration of electricity markets is progressing slowly and in fact cross-border trade in electricity increased by 7% in the second half of 2012. A result that is certainly important considering above all the continuous decline in electricity consumption starting since 2008 as a result of the economic crisis (down 1.2% on an average annual basis).
However, trade volumes reveal only one side of the story. To verify the real integration of the electricity markets, it is advisable to observe and compare the different national prices. In fact, price convergence is one of the main signs of integration and competitiveness within the market. Unfortunately however, the recent report of the Commission (Quarterly report on European electricity markets, Q3-Q4 2012) shows how starting from September 2012, the prices of what was up to now one of the most integrated areas of the European market (the so-called central -Western Europe, which includes France, Holland, Belgium and Germany) has interrupted the progressive trend of convergence.
Although various national circumstances can be considered co-responsible for the reversal of this trend in the area, such as for example the abundant generation of renewables and an increased competitiveness of coal-fired plants in Germany compared to a reduced availability of French and Belgian nuclear power, this Recent development indicates a weakness in European market integration.
Furthermore, the strong differentials still present throughout Europe in the final prices to the consumer indicate that there is still a long way to go to create a truly unified market whose effects are perceived directly by individual consumers. A process that also suffers from the delay in the development of the necessary European infrastructures, primarily those linked to the so-called strategic corridors.
From this point of view, the recent approval of the new regulation on guidelines for trans-European energy infrastructures is an important step forward. The regulation, which aims to resolve various critical issues that have hindered the development of strategic energy infrastructures, introduces, among other things, the interesting concept of Project of Common Interest (PCI). These projects, which will have to contribute to the implementation of the twelve strategic trans-European infrastructure corridors and to areas of interest to the Commission, will have a preferential status and should have a faster authorization procedure. A new approach, which, in addition to certainly representing an interesting investment opportunity for businesses, is also a more effective tool available to the Community to encourage the development of a more integrated energy market, not just electricity.
