EU: At a “tortoise” pace the progress for the internal electricity market

The slow progress of the EU towards the completion of the internal electricity market is noted by the European Court of Auditors (ECA) with his report released today.

“Despite ambitious forecasts and efforts, the EU’s progress towards the goal of connecting electricity markets, and the ultimate goal of ensuring cheap energy for households and businesses, is slow,” he said in his statement. the EEC.

The spate of delays in linking national electricity markets is due to weaknesses in EU governance and a complex system of regulatory tools for cross-border trade, which has acted as a drag on the application of market rules, the ECA says. The monitoring of the market by European Commission and ACER, the EU’s energy agency, has not been able, according to the ECA, to bring about the necessary improvements either. It is also pointed out that the supervisory measures implemented to limit abuses and market manipulation did not go far, in the sense that the main burden of the risk to which the EU electricity market is exposed was transferred to the final consumers.

It is recalled that 1996 was the year that marked for the EU the beginning of a complex project, that of the complete integration of national electricity markets. The aim was to offer the cheapest possible electricity prices to consumers and secure the EU’s energy supply. However, almost a decade after the project’s projected completion time of 2014, in practice the market is still governed by 27 national regulatory frameworks, he points out the report of the EAC. As made clear by the current energy crisis, wholesale prices differ significantly between Member States, while retail prices are still very much affected by national taxes and network access charges and are not open to competition.

In the ECA’s view, the delays are due to the fact that the Commission chose to implement the network guidelines through “terms, conditions and methodologies”, shifting the responsibility for their approval to the national regulatory authorities (NRAs) and ACER. This choice overly complicated and delayed the harmonization of cross-border trade rules. The ECA emphasizes that the Commission, in the relevant impact assessment, did not sufficiently analyze the impact of its decisions concerning market design and governance. Monitoring the consistent application of the rules by Member States was mainly entrusted to ACER. However, the audit found that monitoring and the reporting of relevant data by the organization was incompleteespecially due to insufficient data, lack of resources and lack of coordination with the Commission.

Moreover, the supervision of the market, aimed at detecting and preventing phenomena of abuse and manipulation, was also deficient. The ECA concludes that ACER’s approach to data collection was not comprehensive and that the assessment of the data it ultimately collected covered an extremely small range of abusive behaviour. Also, the agency did not have sufficient resources to analyze the data, nor was it able to support the investigations that needed to be done as the number of alleged cases of market abuse in cross-border transactions continued to increase. The ECA warns that electricity producers, suppliers and brokers can all exploit weaknesses in the system or, even worse, that member states can compete with each other to provide the most lenient environment in terms of sanctions and enforcement. At the same time, ACER does not have the power it needs to ensure consistent enforcement of the rules by member states, the ECA report concludes.

RES-EMP

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