This assessment confirms that the current EU electricity market design is based on relevant and enduring principles and that as such, in ACER’s view, it should be preserved. The current market design should be complemented to support the policy objectives set for the EU as a whole.
The current energy crisis is in essence a gas price shock, which also impacts electricity prices. With the economic recovery in 2021, global gas demand bounced back to pre-pandemic levels and outstripped supply. Despite increasing LNG deliveries to Europe (linked with the rise in gas prices), sharply decreasing Russian gas pipeline supplies and the related geopolitical uncertainty put strong upward pressure on prices. In 2022, Russia’s invasion of Ukraine heightened the crisis resulting in unprecedentedly high gas and electricity prices that severely impact consumers, retail suppliers, market participants and others. Whilstthis ACER assessment is likely to be read against the backdrop of the current energy crisis, its main focus is a somewhat longer-term perspective on the EU’s wholesale electricity market esign, in line with the original task assigned to ACER by the European Commission. Well before the height of the current crisis, the EU’s wholesale electricity market design has been the subject of debate (in technical, academic as well as policy circles), in particular as to whether the current market design is fit-for-purpose given the significant changes needed to deliver the clean energy transition or whether, and if so, to what extent, the market design would need further adjustment.