The EU's single market for energy.
Climate change targets, the EU's Emissions Trading Scheme (ETS) and direct emissions controls increasingly define the end-destination of the EU’s energy transition towards a single market, while the precise path of travel is determined largely by national-level policies. Differences in national approaches create distortions that hamper the increase in cross-border trade required to make the EU single energy market a reality.
- The EU will continue to resist capacity markets and strategic-reserve mechanisms, which create significant market distortions.
- Cross-border electricity trade requires significant new investment, but it is not clear that the financial incentives exist to support it.
- The long-term future of gas-fired generation is in doubt owing to increasing competition from low-carbon technologies.