Liberalizing the Eu Energy Market
Q.1 What do you think are the economic benefit of liberalizing the EU energy market? Who stands to gain the most from liberalization?
The economic benefits of liberalizing the EU energy are followings.
First, greater efficiency leads to lower costs and prices, which is improving competitiveness. It is also crucial for companies that are competing in a more global market. As liberalization and the introduction of competition becomes more widespread across Europe this should lead to further efficiency gains, costs reductions and the potential for lower prices. A completely open European market will allow all consumers to benefit from the cheapest available sources of energy and will drive companies’ costs down based on economic scales.
Second, it ensures a secure and stable energy supply in Europe. It can stimulate the competition between the energy companies and attracts more investments on the European internal energy network. For instance, when Russia and Ukraine “show off” their gas line’s time once more, the EU energy market is helpful in reducing Eastern European country energy supply risk such as Bulgarian and Hungary’s shortage of energy. Moreover, it increases the ability to fight with the Russian energy monopoly among their energy companies.
In conclusion, competition ensures competitive prices. It is able to balance the issues of competition, energy security and environment protection in the EU energy market. For most industries, energy is essential to the cost base and competitiveness. The European industries compete internationally. Increase in energy costs cannot be transferred to customers without risking reduction in market share. Once EU’s energy market can be established, energy’s cost and the price will be dropped largely. The energy exporting country and the country of consumption will obtain the high income.
Q.2 what are the implications of liberalization for energy producers in the EU? How will the environment they face change after
The economic benefits of liberalizing the EU energy are followings.
First, greater efficiency leads to lower costs and prices, which is improving competitiveness. It is also crucial for companies that are competing in a more global market. As liberalization and the introduction of competition becomes more widespread across Europe this should lead to further efficiency gains, costs reductions and the potential for lower prices. A completely open European market will allow all consumers to benefit from the cheapest available sources of energy and will drive companies’ costs down based on economic scales.
Second, it ensures a secure and stable energy supply in Europe. It can stimulate the competition between the energy companies and attracts more investments on the European internal energy network. For instance, when Russia and Ukraine “show off” their gas line’s time once more, the EU energy market is helpful in reducing Eastern European country energy supply risk such as Bulgarian and Hungary’s shortage of energy. Moreover, it increases the ability to fight with the Russian energy monopoly among their energy companies.
In conclusion, competition ensures competitive prices. It is able to balance the issues of competition, energy security and environment protection in the EU energy market. For most industries, energy is essential to the cost base and competitiveness. The European industries compete internationally. Increase in energy costs cannot be transferred to customers without risking reduction in market share. Once EU’s energy market can be established, energy’s cost and the price will be dropped largely. The energy exporting country and the country of consumption will obtain the high income.
Q.2 what are the implications of liberalization for energy producers in the EU? How will the environment they face change after