Electricity markets liberalisation: Are fears justified? 

Contrary to what is generally admitted, particularly in France, liberalisation does not imply any reconsideration of the public-services mission, the paper states. Regarding the European definition of "services of general economic interest", public services' mission should be transferred to new operators, the author argues. 

However, the implementation of the liberalisation process requires some major institutional and organisational changes that can only be achieved following a long-term process. Fears concerning liberalisation are linked to the difficulties that reorganisation can create. The risk is more prevalent in member states such as France, where the former system was well installed, efficient and prices were stable. 

Moreover, the expectations of electricity market liberalisation – to satisfy demand while proposing a reasonable price, to ensure the supply's quality and continuity and improve environmental efficiency – have not been fulfilled. 

Market competition is nevertheless pushing operators to favour technologies emitting less CO2 emissions, as carbon dioxide and raw materials represent a major part of production costs. Efficient regulation would ensure that costs increases would result from the use of new technologies and not be the consequence of liberalisation, the paper outlines. 

According to the author, the improvement of electricity-market efficiency requires the development of electricity network, tighter market regulation and a co-ordination of European energy policies. Only powerful and effective regulatory authorities would correct the structural imperfection of the electricity market to allow the recently created market to run smoothly, the paper concludes.