EU electricity market integration and cross-country convergence in residential and industrial end-user prices

Ernesto Cassetta, Consuelo Nava () and Maria Zoia

Energy Policy, 2022, vol. 165, issue C

Abstract: Despite significant efforts in market integration and regulatory harmonization, large heterogeneities in retail electricity prices across Member States still remain one of the main concerns of the European Union. Here, the cross-country convergence of households and industrial end-user electricity prices in the EU between 2008 and 2021 is investigated. Relying on the notion of club convergence, empirical findings reveal the existence of multiple clubs. The household and non-household market segments exhibit rather different paths in terms of price convergence. Domestic end-user prices show higher dispersion and heterogeneity across national electricity markets than industrial one. Differences across convergence clubs seem to be related with public intervention in the electricity end-user price setting, disparities in the range of household or industrial consumers under regulated end-user prices, and different criteria used among countries in defining energy components. Policy-wise, the club convergence analysis emphasizes the need of stronger cooperation for public intervention and regulation, while considering how end-user price setting can support the decarbonization of the EU electricity systems.

Keywords: Retail price; Electricity; Market integration; Club convergence; European union (search for similar items in EconPapers)
JEL-codes: C01 L51 L94 Q41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:165:y:2022:i:c:s0301421522001598

DOI: 10.1016/j.enpol.2022.112934

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