2022-10-06 Archiv

Eurolectricity.

The Spanish-Portuguese wholesale market intervention is a thought-through instrument that has, despite significant drawbacks, merits for the specific context. However, three conditions need to hold to make the intervention work as intended: little interconnection to neighbouring countries, an unconstrained gas market, and only limited forward hedging. In many European countries outside the Iberian Peninsula, none of these prerequisites holds.

To mitigate the impact of high energy prices, targeted measures such as income support (e.g. Bethuyne et al. 2022) are better policies than an intervention in the wholesale market.

Anselm Eicke Lion Hirth Christoph Maurer Jonathan Mühlenpfordt Ingmar Schlecht: The Iberian electricity market intervention does not work for Europe