Electric power market models in Europe

Abstract

The main motivation behind restructuring in Europe is to increase efficiency by using different mixture of generation resources and eliminate as many externalities as possible that make electricity service expensive and inflexible. The European Union is also pushing for this restructuring. The member countries need to achieve competitive market structures within a certain timeframe. For this purpose, a directive was issued that sets up common market rules that cover issues such as organization and functioning of the electricity sector, access to the market, regulatory authorities and rules, and the real-time system operations. This paper will focus on the market models adopted by and implementation status in some European countries.