3FOOD

Third Industrial Revolution Consulting Group
Development of an Integrated Wholesale European Market and Secondary Markets
Over the last two decades, Europe's energy policy has consistently
been geared towards achieving its main objectives: affordable and
competitively priced, environmentally sustainable, and secure energy
for everybody. A single, well-integrated internal European energy
market is seen as a fundamental prerequisite to achieving these
goals. 43
Integration of regional markets is currently in progress. However,
building out of interconnectors and regulatory frameworks to support
harmonized market rules will need to continue to evolve on a
regional and EU-wide level.
Luxembourg is already fully integrated into the German electricity price zone. As a result, there
is no domestic electricity wholesale market in Luxembourg. Moving forward, Luxembourg
should consider its position in the evolving European integrated electricity market to ensure the
country is well-optimized for the future and is aligned with its Third Industrial Revolution
energy vision.
Larger, interconnected bulk power markets can lead to increased efficiency in planning for new
transmission investment and maximizing capital spending across national boundaries. These
markets also create efficiencies in maintaining grid reliability, dispatching the most costeffective
power generation (and DR resources) that further directs investment into more
efficient power production technology over time. Indeed, these are the principles espoused by
ENTSO-E. 44
Furthermore, a number of new secondary market models are being tested in Europe, including
local flexibility markets and flexibility contracts with aggregators. These models are required to
address a new energy mix, new consumption patterns (e.g., e-mobility), and the movement
towards consumers becoming prosumers.
Major energy companies, such as RWE in Europe, are moving aggressively in this emerging
landscape, taking advantage of opportunities to integrate DER and DR, while remaining flexible
to adapt new, emerging technologies (e.g., solar power combined with battery storage) that
have not yet been commercialized to scale.
43 European Commission. “Progress towards completing the Internal Energy Market”. 2014. Available at:
https://ec.europa.eu/energy/sites/ener/files/documents/2014_iem_communication_0.pdf
44 ENTSO-E. “Who Is ENTSO-E?” 2015. Available at: https://www.entsoe.eu/about-entso-e/Pages/default.aspx
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