What is the impact of the EU Energy Union on electricity prices? Results for selected member states
This paper analyses how strongly EU energy policies have driven electricity wholesale prices. Especially, it investigates whether the activities of the Energy Union directed to increasing competition in the electricity system, creating an internal market without barriers for electricity flows, supplying sustainable and secure electricity, has led to a decline in electricity prices. Therefore, renewable shares, degree of competition, cross border flows as well as fossil fuel prices and demand for electricity serve as explaining variables in a fixed/random effects model. The results suggest a significant impact of renewable energies, competition and market integration on wholesale electricity prices. Moreover, the analysis displays that increasing RE levies offset the decline in energy supply costs, which results in increasing retail prices.