The current energy crisis has put into question the functioning of Europe’s electricity market, and more specifically the impact of gas prices on the price of electricity. In this regard, two factors play a key role: the share of gas generation in the European electricity mix, and the price-setting mechanism. The energy crisis has shown how important these processes are when it comes to understanding the recent skyrocketing energy prices and the overall inflation they have led to, yet they are very complex and difficult to fully grasp.
This year the European Union is planning a thorough reform of the European electricity market. This ‘fifth energy package’ aims to provide solutions to the shortcomings in the design of the market which have been exposed by the energy and inflation crisis.
This ETUI lunch event aims to demystify the functioning of the energy market by breaking down the practical and technical puzzle of the ‘marginal pricing’ system, the nexus between electricity and gas prices, and the incentive mechanisms for renewable energy sources. This exercise of clarification on how the market works will also help us judge to what extent the foreseen EU electricity market reform is going to be socially just, and what further adjustments could be made in this respect.
The functioning of the European electricity market and why a reform is necessary, Aleksandra Baranska, Directorate General for Energy of the European Commission
Comments: Aislinn D'hulster, Department of Economics at Ghent University, Joanna Maćkowiak-Pandera, Forum Energii, Stephen D. Thomas, University of Greenwich and Ludovic Voet, ETUC
Chair: Willy De Backer, Editor of the Green New Deal newsletter ETUI
