Will the EU’s Reform of Retail Electricity Markets Help Consumers?

Summary:

Politicians across Europe have been concerned about retail energy bills since global demand picked up after the pandemic, pushing costs to new highs. The problem worsened when Russia invaded Ukraine, throwing energy markets into turmoil and eventually convincing Europe it had to wean itself off cheap Russian gas. In 2022/23, EU energy policy-makers  focused on limiting the high profits of energy producers, and redistributing them to households. Energy retailers – companies which buy energy on wholesale markets to resell it to households and businesses – suffered the opposite problem. Many energy retailers became unprofitable in 2021, as they sold energy to consumers at prices below skyrocketing wholesale costs. Many collapsed as a result, and their consumers had to be transferred to other retailers. Energy consumers ultimately paid for these failures through higher energy bills. The European Commission then proposed reforms to both retail and wholesale electricity markets. This insight  examines how the Commission wants to reform retail electricity markets and whether it will work.

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ESO Records

Cardiff EDC: Reform of the EU’s electricity market announced by the European Commission (2023) https://www.europeansources.info/record/reform-electicity-market-european-commission-2023/

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