Despite ambitious projections and a certain amount of effort, the EU has made slow progress towards its objective of connecting electricity markets to ensure access to cheap power for citizens and businesses, according to a report by the European Court of Auditors. Delays in coupling national power markets have piled up because of weaknesses in EU governance and a complex system of regulatory tools for enabling cross-border trade, which has held back the implementation of market rules. Nor has market monitoring by the European Commission and ACER, the EU’s energy agency, brought sufficient improvement. Surveillance measures to restrict abuse and manipulation have not gone far enough, meaning that the main burden of risk on the EU electricity market has been passed on to final consumers.

In 1996, the EU embarked on a complex project to fully integrate national electricity markets. The goal was to deliver the cheapest possible electricity prices for consumers and make the EU’s energy supply more secure. However, nearly ten years after the project’s scheduled completion in 2014, the market is in practice still governed by 27 national regulatory frameworks. As the current energy crisis has emphasised, wholesale prices differ significantly between member states and retail prices remain heavily influenced by national taxation rates and network charges, rather than being open to competition.

“Despite the welcome and needed ambition by the EU, electricity markets in Europe could be much more integrated” said Mihails Kozlovs, the ECA member who led the audit. “The current energy and cost-of-living crisis facing EU citizens has made it even more urgent for the EU to finalise its internal electricity market.”