Abstract

This chapter summarizes current knowledge concerning electricity market integration. First, we highlight the expected benefits in terms of efficiencies and making better use of resources, especially in the context of increasing generation from intermittent renewables that are needed for decarbonization. Second, we review studies of market integration, taking into account their findings with respect to different world regions and other energy markets. Given that in Europe energy and environmental policy have supported the emergence of a common market for electricity, we examine studies which assess how much the objective of a common European energy market has been achieved. Based on their findings, we make inferences with regard to barriers and enablers of electricity market integration and discuss whether wholesale price convergence has been achieved. Finally, we summarize the findings of the studies reviewed and their implications for different stakeholders.