The EU ambition is to create an integrated electricity market in Europe, enabling customers to choose their supplier. To achieve this, all bottle necks to cross-border exchanges should be removed to allow the electricity to flow between EU Member States in response to price
signals in the market.

The aim is to improve competition, increase security of supply, and improve the efficiency of the existing infrastructure, in addition to sending the right investment signals to utilities and network operators.

Several energy packages have been adopted to liberalize the market, the last one being the “Third Energy Package”, which includes important provisions for unbundling of the utilities to achieve a separation of the production and distribution of electricity. Most of the package became law in March 2011, except for the unbundling provisions that will become law in 2012. Following the EU summit of 4th February 2011, “a fully functioning, interconnected and integrated internal energy market should be completed by 2014”.

As electricity generated form wind increases the bigger the challenge for the transmission capacity as reserve power capacity are needed to sustain security of supply. The forecasted increase in intermittent electricity in 2015-2020 is about 9 000MW of wind power and 4 000MW of solar power per year in the Central Western European Region (CWE) and in the Nordic countries.

Norway and Sweden were the first two countries to introduce a common market for power trading – Nord Pool Spot. This market was rapidly extended to other countries and includes today, Denmark, Finland and Estonia in addition to Norway and Sweden. With the recent market coupling initiatives several other EU Member States are now coupled with the Nordic Power Market: France, Belgium, the Netherlands, Luxemburg and Germany (Central-Western European region - CWE) as well as Poland and UK. In the very near future, the other Baltic countries, Latvia and Lithuania, will also join the Nordic market. The aim is to optimize transmission capacity and to progressively achieve convergence of electricity prices in addition to increased security of supply.

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