Electricity Market Politics in Flux: Decarbonisation, Geopolitics, and Consumer Roles

Abstract

The energy transition brings with it structural changes to the electricity sector. Over the past few years, electricity market policies and energy transition policies have become increasingly intertwined. This is visible, for instance, in how the European Union (EU) has included provisions on how to support renewable energy expansion in its 2024 reform of the electricity market rules. The need to coordinate the electricity market design with the energy transition has grown over time. The electricity system is undergoing a transformation from relying primarily on conventional energy sources, towards higher shares of volatile production from renewable energy sources. Several European countries today have very high shares of renewable energy in their electricity mix, with the EU average at 47.5% in 2024 (Eurostat, 2025). This has systemic effects for the electricity system, putting new demands on electricity market design, system operation and infrastructure. New pressures have been added with the energy crisis, which spurred a number of state interventions to protect and shield consumers from high prices. The EU’s regulatory framework for electricity is continuously evolving. Even though the EU maintains a market-based model of a liberalised energy sector, it continues to allow for state action via subsidies to ensure the expansion of renewable energy, capacity and non-fossil flexibility. Moreover, the EU has also opened up to allow more state subsidies on the consumer side. Member states also enjoy significant flexibility in how to design various support schemes as well as having the possibility to regulate retail prices and protect vulnerable energy consumers from energy poverty. This panel comprises articles on electricity market politics or governance in Europe considering the new challenges stemming from decarbonisation, geopolitical challenges and a changing role of consumers and citizens. The papers included analyse the development of European electricity markets (including policy changes, the regulatory framework and the relative role of the state and the market in the governance of the sector), the development of support systems and protective measures, the role of electricity prices and active consumers for achieving decarbonisation targets , and distributional effects of markets and support systems. Empirically, papers could focus on the EU level or consider one or more European countries.

Title	Details
Balancing Immediate Relief and Structural Reform in the Electricity Market: Navigating the Intersection of Industrial Policy and Electricity Market Design in Germany	View Paper Details
Regulatory Reform to Unlock EU Electricity Markets	View Paper Details
Public Acceptance and Electricity Governance in Building Decarbonisation	View Paper Details
Explaining the European Electricity Market Reform: Advocacy Coalitions, Policy Learning and a Temporary Storm	View Paper Details
Soft Law, Hard Deregulation: Energy Poverty Reporting and the Commission's Push for Market Standardization	View Paper Details