The Agency for the Cooperation of Energy Regulators (ACER) has published its annual report on the integration of the European Union (EU) electricity market, the 2024 Market Monitoring Report, providing an overview of the progress, challenges, and opportunities for accelerating the European energy transition.
The growing importance of renewable energy, driven by sources such as wind and solar power, has made a well-integrated electricity market crucial. According to ACER, integration allows for the optimisation of available resources by sharing excess energy across regions and improving overall efficiency. Deeper integration not only reduces price volatility but also increases investor confidence and makes energy costs more competitive, benefiting the entire European economy.
However, the report also addresses the obstacles on this path. In 2023, the costs of congestion in the electricity grids reached a record high of €4 billion, while 27% of the necessary rules to optimise electricity markets are still being implemented. These delays slow down the flexibility of the system and limit the ability to respond to fluctuations in demand and supply. Even the forward markets, which should provide investors with a clear view of future prices, currently offer reliable projections only for one year, a situation that hinders long-term investments crucial for supporting the energy transition.
Projects such as PICASSO and MARI, designed to improve energy balancing management at the European level, have made limited progress. Last year, only a few new network operators participated in these platforms, despite their potential to reduce balancing costs and enhance the resilience of the electricity system. In this regard, ACER emphasises the importance of greater participation by operators to fully leverage these resources.
To tackle future challenges, ACER calls in its report for accelerating energy market integration by improving connections between national grids; promoting system flexibility by enhancing demand response and investment in modern infrastructure; and strengthening the forward markets by providing greater visibility on prices, offering more certainty for investors.
One of the new features of the report is the introduction of interactive dashboards that allow access to key data on energy prices, balancing volumes, and long-term transmission rights, increasing transparency. These tools help to better understand how the market operates and facilitate informed decision-making by all involved parties.
