The current situation and mid-term prospects for European electricity markets

It is fashionable to state that there are three objectives of European energy policy: security of supply, low carbon and affordability. Yet this “trilemma”—how to achieve all of these three simultaneously—is far from straightforward. None of the three objectives is well defined. What does security mean? Some suggest this means self-sufficiency, yet a moment’s reflection tells us that if in the last century Europe had pursued this, then not much economic development would have taken place. What would have replaced imported oil and gas? Next, what does low carbon mean? Is this an instrumental objective in respect of climate change or the binding objectives for European production of carbon? Is it conditional on others or unilateral? Over what time period should this be addressed? Finally affordability might mean low retail bills for customers, protection against fuel poverty, or it might mean industrial competitiveness. These are very different things.

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