WHAT IS IT

Electricity is not a primary energy source but is one of the primary needs in our society. In the Energy Community, electricity is generated from both renewable and non-renewable energy sources and transferred to consumers through the transmission and distribution electricity networks at frequency of 50 Hz. As the most versatile form of energy, electricity is being widely used and supplied to over 30 million end-users across the Energy Community Contracting Parties.

As a commodity, electricity is specific because production and demand must always be in balance and electricity as such cannot be directly stored. It is traded in the electricity markets which are used to match supply and demand in a competitive, transparent and non-discriminatory manner. Well-functioning and competitive electricity markets are providing a reliable price signal for market participants and for the new investments needed to decarbonise and modernise electricity sectors in the Contracting Parties of the Energy Community.

WHY IT MATTERS

Human activities and the economy are largely dependent on the reliable electricity supply and the level of its price. To that end, electricity markets are vital for delivering affordable, secure and sustainable energy through the development of competition.

Electricity produced from renewable energy sources plays a crucial role in the energy transition. Electrification, namely introduction of technologies or processes that use electricity into the sectors that heavily rely on fossil fuels such as transport (electric vehicles) or heating and cooling (heat pumps) sectors, is a key pillar of the decarbonisation of economy and mitigating climate change.

To achieve energy transition and meet their climate targets, electricity sectors of the Contracting parties will have to move away from fossil fuel electricity production to renewables. Transmission and distribution electricity grids will also need to modernise and increase capacity for accommodating the growing demand for electricity. This will require huge investments into the electricity sectors of the Contracting Parties. An integrated electricity market will have a pivotal role in achieving cost-effective energy transition and delivering sustainable electricity in a secure and affordable way. Therefore, Energy Community is focusing on establishing a harmonised legal and regulatory framework governing electricity market that will enable full electricity market integration of the Contracting Parties among themselves and into the EU internal electricity market.