Competition policy in European electricity markets [in French]

Abstract : This article is a critical analysis of the instruments and practices of European competition policies regarding market power on wholesale electricity markets. Because of the specificities of the electricity sector, competition policies are facing difficulties to identify market power inasmuch as no methods is able to perfectly detect the existence of potential or actual exercice of market power in this sector. Morevover, competition authorities base their actions on particular intervention methods. The main part of their interventions relates to concentration controls. Therefore their capacity to restrain the exercise of market power is relatively limited. In light of these observations, the article discusses the recent evolutions of European competition policies on wholesale electricity markets. The DG Competition Energy Sector Inquiry of 2007 seems to inaugurate a new practice of competition policy in the electricity sector. The initiative and decision powers appear to be essentially on the European level in the field of mergers control and they extent to an evaluation of the functioning of the different markets. This results in investigation decisions on some firms and also legislative proposals within the third legislative package. This could result in a stronger monitoring of electricity markets based upon more formal supervision instruments and on a more continuous base.

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