An Integrated Electricity Market
Strengthens Europe’s
Competitiveness
Pär Holmberg and Thomas Tangerås
Research Institute of Industrial Economics (IFN)
Stockholm
Wholesale electricity market
Advantages of market integration
(cross-border trade)
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Reduces production costs.
Prices stabilized.
Improves competition in electricity markets
Mainly electricity consumers gain.
Increase employment and competitiveness of EU
Cheap reform (but politically expensive?)
Local prices => Improved integration
• Correct price of bottlenecks=>efficient power system.
• EU design with one price per country can be abused.
Avoid home-biased grid investments
• European energy regulator supervise investments.
• Merchant transmission lines as a complement.