The Development of Energy Markets in Europe

Europe has been engaged in a debate aimed at building an integrated and competitive energy market since the early 1990s. The European Union has instituted to share the responsibility to develop a strategic policy to change current trends, and hence a truly competitive, single European electricity and gas market is expected to open the competition of Europe-wide companies. In this vain, the aim of this chapter is to analyze the developments of European energy markets and regional markets in accordance to the market efficiency criteria and financial aspects of energy. Despite the physical, economic, and political barriers, the number of financial players participating in these markets is continuously increasing and a considerable success has been achieved for efficiency of the markets. However, 10 years after the Lisbon Treaty, the European energy markets are significantly far from the unique energy market goal. Moreover, in Europe’s energy market there are serious malfunctions causing moves to regional fragmentation. Generally, it is agreed that the future structure of the European energy market has not been yet clearly defined.