European Energy Market

Topics: Economics, Sweden, Competition Pages: 2 (486 words) Published: December 2, 2011
1.What do you think are the economic benefits of liberalizing the EU energy market? Who stands to gain the most from liberalization? -Economic benefits:
The consumers would have freedom to choose their energy providers and probably could lower the costs. They will have improved service quality as they will have variety of producers. Energy providers can improve efficiency through innovation to be competitive which in turn will also reduce prices. Larger utilities should be able to realize economies of scale which will able them to compete more effectively. -The consumers and businesses would gain the most from liberalization: Consumers could get the best lowest prices possible from producers; better production with the use of innovative technology. Business would have more business in the competitive market and could gain more profit. 2.What are the implications of liberalization for energy producers in the EU? How will the environment they face change after liberalization? What actions will they have to take? -Implications:

Replace the markets of its 27 member states with a single continent wide market for electricity and gas. The majority market shares would be acquired and dominated by a large single enterprise eg: Electric de France. -Changes in environment after liberalization:

There are a lot of acquisitions and mergers in the energy markets. Politicians and governments try to protect their firms from other competitions with regulations. Bigger firms will try to acquire firms in local country.

Government would impose conditions to stop foreign companies from acquiring local companies. The local authorities would try to protect the local company advantages. 3.Why is the deintegration of large energy companies seen as such an important part of any attempt to liberalize the EU energy market? -There are vertically integrated producers consists of utilities that are producing, transmitting and selling power which made the markets lack of...
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