Communication: Launching the public consultation process on a new energy market design

In its Political Guidelines, the Juncker Commission made the development of a resilient Energy Union with a forward-looking climate policy one of its strategic objectives.

This ambition was confirmed in the Commission Work Programme for 2015 and further detailed in the framework strategy Resilient Energy Union with a Forward-Looking Climate Change Policy with the aim of setting the conditions for a reliable and affordable energy for all, to apply the efficiency first principle and to make the European Union the world leader in renewable energy.

Achieving these goals will require a fundamental transformation of Europe's energy system including the redesign of the European electricity market, providing more predictability linking wholesale and retail as well as attracting further investments. This will contribute to delivering a new deal for Europe's energy consumers as spelled out in the adjacent Communication COM(2015)339.

Europe's electricity system is in the middle of a period of profound change. Since the adoption of the Third Internal Energy Market Package, electricity policy decisions have enabled competition and increasing cross-border flows of electricity. Wholesale markets are increasingly characterised by fair and open competition, and – though still insufficient – competition is also taking root at the retail level. With the introduction of so called "market coupling" and "flow-based" capacity allocation, electricity can more efficiently be traded across Europe. At the same time electricity generated from renewable sources has become one of the most important sources of electricity thanks to the Renewables Directive and the efforts of Member States, heralding a transition towards a low-carbon energy system.

These are all elements of a future-oriented energy system, but Europe still faces considerable challenges before its energy landscape is fit for purpose. In order to manage these changes and benefit fully from them we must look again at how Europe's electricity system and markets are organised and regulated.

• Primary Source

EUR-Lex: SWD(2015)142: Investment perspectives in electricity markets http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2015:142:FIN

ESO: Background information: Transforming Europe's energy system - Commission's energy summer package leads the way http://www.europeansources.info/record/press-release-transforming-europes-energy-system-commissions-energy-summer-package-leads-the-way/

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