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TWENTY EUROPEAN COMPANIES and associations are calling on EU Heads of State to show the courage and vision to create a single market for electricity by 2015. It comes just a few days before the 25th anniversary of the signing of the Single European Act on 17 February 1986, and reminds leaders that 25 years ago European Heads of State showed courage and vision by creating a single European market.
But 25 years after the signing of the Single European Act there is still no single market in electricity. European legislation has guaranteed some choice of electricity provider, but only 5% of Europe's electricity is traded across borders. As a consequence, competition is inefficient and allows electricity suppliers to pass any increase in the price of the coal, gas - or in the future carbon - straight onto the consumer without risk of significant loss of business.
A properly functioning European market in electricity would have many benefits:
- Increased competition leading, in the long-term, to reduced electricity prices
- Improved security of supply (and reduced risk of blackouts)
- Reaping the full advantages of fuel-free, pollution-free renewable energy sources produced in ever greater quantities in many parts of Europe
- Opportunities for increased trade in electricity regardless of the source
To achieve a single market in electricity, Europe needs both the infrastructure to transport electricity from one part of Europe to another, and a common set of market rules.
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