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Timing electricity market reform(s)

How can various market reform elements and processes be best timed to address short-term needs while also preparing for longer-term challenges?



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Electricity market reform is a central issue in European energy policy in 2023. The political focus is on reducing record energy costs that constitute a pressing social and economic problem. Thus, distributional measures have been taking central stage in the debate. But the underlying energy crisis can only be resolved by measures that ensure rapid investment in new supply.

Those short-term imperatives are further complicated by the long-term challenge to develop a reliable supply of competitive electricity for a highly electrified society. Thereby, electricity markets can incentivise the deployment of clean energy technologies, including renewable generation capacity as well as the flexible assets needed to support them. Market design can also help to ensure the efficient and safe operation of the electricity system, which will increasingly become the backbone of our decarbonised economies.

Agreeing on ways to improve the functioning of electricity markets to achieve efficient dispatch, efficient investments and fair distribution of cost and benefits will be a complex and risky exercise. The planned 2023 reform of the European market will be only one piece of a larger puzzle.

In this event we discussed how different market reform elements and processes could be best timed to properly address short-term needs and prepare for longer term challenges.

Public | On the record