The European Energy Market

European Energy Market Q1) 1. Economic benefits would be that the consumers would have freedom to choose their energy providers and probably could lower the costs. The variety of producers will improve the quality of their service. Energy providers can improve efficiency through competition which will also reduce prices. Larger utilities should be another result, which will allow them to compete more effectively. 2.I believe both the consumers and businesses would gain from liberalization: Customers should have more choices of energy providers which would increase the likelihood they would have to pay less for their energy and the energy companies could also buy energy from the cheapest source. Q2 Implications: Will replace the markets of its 27 member states with a single market for electricity and gas for the entire continent. It permits the biggest energy groups to acquire other smaller energy firms in the continent. Hill 2012) Changes in environment after liberalization: There ar e a lot of acquisitions and mergers in the energy markets. Fights between governments protecting their firms and the biggest groups which want to acquire them are a probability. Bigger firms will try to acquire firms in local country. Actions: Government would have to impose conditions to stop foreign companies from acquiring local companies, with the local authorities trying to protect the advantages of the local companies. Q3)Why is the de-integration of large energy companies seen as such an important part of any attempt to liberalize the EU energy market? The biggest energy groups are national and they have monopoly. The de-integration of the biggest companies will encourage the smallest companies to be more active and promotes fairness in the market and makes energy firms more equal. It would also permit the introduction of new providers on the energy market. So, competition between them would increase the†¦