European electricity markets generation and installed capacity

European electricity markets generation and installed capacity

During the period 2003-2015, the number of main (main = market coverage above 5 % of national electricity generation) electricity generating companies in the European Union fluctuated between 82 and 93 companies, without a clear up- or downward trend.

Electricity markets – generation and installed capacity
In 2015, the number of electricity generating companies representing at least 95 % of national net electricity generation remained limited to five or fewer in four EU Member States. Germany did not report a number for this indicator.

Between 2014 and 2015, the number of electricity generating companies representing at least 95 % of national net electricity generation remained stable in seven EU Member States and increases could be observed in 17 Member States, while the number went down most significantly in Austria and Denmark.

Five EU Member States declared only one single enterprise to have a significant share of electricity generation at national level in 2015 (no change compared to 2014). In the United Kingdom and in Lithuania there are six and in Bulgaria and Ireland five electricity generating companies of considerable importance.

In Poland the number of electricity generators with a share of over 5 % of national generation decreased by two units in 2015 compared to 2014.

The number of main enterprises at EU-28 level fluctuated between 82 and 90 companies between 2003 and 2015.

Cyprus and Malta report a monopoly situation where one single company is responsible for the totality of electricity generation, and thus the installed capacity.

Table 3 displays the market share of the largest generator in the electricity market in 2015 in percentage of national production. Apart from Malta and Cyprus, where only one electricity company dominates the national production, figures above 80 % for the largest electricity generators are observed in France (86 %), Estonia (80 %) and Croatia (78 %). A size of the largest generation company on national level below 25 % can be observed in Poland (18 %), Lithuania (23 %) and in Spain (25 %).

The market share of the largest generator for Bulgaria, Austria, United Kingdom and the Netherlands were not reported.

Member States also provided information on new installed electricity generation capacity during 2015. From Table 4 it can be concluded that the new installed capacity increased compared with 2014 from 24 to 27 Gigawatt. This increase is mainly due to significant changes (in absolute terms) in Germany, United Kingdom and in the Netherlands

Electricity markets – retail

EU Member States (and Norway, FYR of Macedonia, Montenegro, Bosnia and Herzegovina, Serbia and Turkey) also reported information concerning the retailing (sales) sector.

Eight main companies can be found in Slovenia, seven in Austria. Markets where only one main company is dealing with the sales of electricity are registered in Greece, Cyprus, and Malta.

The number of main electricity retailers to final consumers and their cumulative market shares for all EU Member States plus Norway, Turkey, Bosnia and Herzegovina, Serbia, Montenegro and FYR of Macedonia. If one looks to the remaining market, which is the market that is covered by non-main retail companies that have a market coverage of less than 5 %, this market for “minor” retail companies is the largest in Sweden (62 %) and in Italy(59 %). The market for “minor” retail companies is below 25 % in 16 out of the 25 EU countries that reported this indicator.

Since July 2004, small business consumers in the EU have been free to switch their electricity supplier, and in July 2007 this right was extended to all consumers. Independent national regulatory authorities have been established across the Member States to ensure that suppliers and network companies operate correctly.

However, a number of shortcomings were identified in the opening-up of markets, and it was therefore decided to embark upon a third legislative package of measures with the aim of ensuring that all users could take advantage of the benefits provided by a truly competitive energy market. The European Commission launched its third legislative package to liberalise energy markets in September 2007. These proposals were designed to: create a competitive energy market; expand consumer choice; promote fairer prices; result in cleaner energy; and promote the security of supply. During 2009, a number of these proposals were adopted by the European Parliament and the Council. (Source)

European electricity market 2016

European electricity market 2016

Since the adoption of the Third Internal Energy Market Package, wholesale markets are increasingly characterised by fair and open competition, and – though still insufficient – competition is also taking root at the retail level. As a result of increased interconnection and closer cooperation between electricity players across borders (e.g. in so-called “market coupling” or with “flow-based” capacity allocation), electricity can more efficiently be traded across Europe.

Electricity generated from renewable sources has become one of the most important sources of electricity, heralding a transition towards a low-carbon energy system.

The move away from generation in large central power plants towards de-central production from renewable energy sources requires an adaptation of the current rules of electricity trading and changes the existing market roles.

The electricity market needs to adapt to this new reality; it needs to fully integrate all market players – including flexible demand, energy service providers and renewables. The new market design should ensure that energy markets can fully support this transition at minimum cost.

This will mean developing a new framework which delivers market arrangements: suitable for an interconnected EU-wide electricity market providing clear price signals for new investments and facilitating the further development of renewables, to promote regional cooperation and coordination on energy policies, to enable cooperation on development of renewables, including on support schemes, to safeguard appropriate governance and regulatory framework as well as to provide a truly European dimension to security of electricity supply. More:

Electricity market design

Electricity market design

A new electricity market design is mandatory.

Today’s electricity market differs fundamentally from the market five years ago. Firstly, the share of electricity produced by renewables is expected to grow from 25% today to 50% in 2030. But when the sun is not shining and the wind is not blowing, electricity must still be produced in sufficient quantities to deliver energy to consumers.

Electricity prices have to send the right signals to investors in order to make sure that necessary long-term investments will take place and are done as cost-effectively as possible. Finally, the market has to provide the right framework and incentives for consumers to become more active and to reap the full benefits of market integration and to actively contribute to keep the electricity system stable. To achieve all this, the Commission is proposing to redesign of the electricity market. As a first step the Commission is launching a public consultation with legislative proposals expected in the second half of 2016.

EEU Academy CoursesGAS IndustryElectricity