Welcoming New Entrants into European Electricity Markets

Tim Schittekatte, Valerie Reif and Leonardo Meeus
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Tim Schittekatte: Florence School of Regulation, Robert Schuman Centre for Advanced Studies, European University Institute, Via Boccaccio 121, 50133 Florence, Italy
Valerie Reif: Florence School of Regulation, Robert Schuman Centre for Advanced Studies, European University Institute, Via Boccaccio 121, 50133 Florence, Italy
Leonardo Meeus: Florence School of Regulation, Robert Schuman Centre for Advanced Studies, European University Institute, Via Boccaccio 121, 50133 Florence, Italy

Energies, 2021, vol. 14, issue 13, 1-20

Abstract: In this review paper, we select four important waves of new entrants that knocked on the door of European electricity markets to illustrate how market rules need to be continuously adapted to allow new entrants to come in and push innovation forward. The new entrants that we selected are utilities venturing into neighbouring markets after establishing a strong position in their home market, utility-scale renewables project developers, asset-light software companies aggregating smaller consumers and producers, and different types of communities. We show that well-intentioned rules designed for certain types of market participants can (unintentionally) become obstacles for new entrants. We conclude that the evolution of market rules illustrates the importance of dynamic regulation. At the start of the liberalisation process the view was that we would deregulate or re-regulate the sector after which the role of regulators could be reduced. However, their role has only increased. New players tend to improve the sustainability of the electricity sector in environmental, social, or economic terms but might also present new risks that require intervention by regulators.

Keywords: electricity markets; integration; demand response; innovation; regulation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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