The Interplay Between Liberalization and Decarbonization in the European Internal Energy Market for Electricity

Abstract

This contribution explores the interplay between liberalisation and decarbonisation of the European electricity market. The focus of this piece is to see whether liberalisation of the EU electricity market, in Eu- rope realised by means of the unbundling regime, inherently promotes decarbonisation of the grid. In other words, it seeks to explore if decar- bonisation of the electrical grid is a positive externality of liberalising the market, absent of any other policies promoting the scale up of renewa- bles in the grid. To this end, it examines existing economic and economet- ric literature on the issue and places it in the greater context of internal energy market legislation and European energy policy.