Electricity Directives And Evolution Of The Eu Internal Electricity Market

The liberalization of the electricity market in the EU is aimed at creating a competitive market in order to increase economic efficiency and reduce the role of the state. For a long period of time, the electricity sector in the EU member states was organized in the form of a natural vertically integrated state-owned monopoly. It proved to be ineffective in terms of ensuring the (competitive) market price of electricity. With technological advances in electricity generation and transmission, the reform of the electricity sector became possible and unavoidable. Namely, all production and development activities rely on the use of energy, i.e. electricity in most cases, which makes this type of energy irreplaceable by other energy sources. Given the increased level of electricity usage and the interconnectedness of economic growth and electric power system development, it is important to stress the need for a consistent liberalization of the EU electricity market within the context of Electricity Directives. The reason lies in the fact that a mere enforcement of Electricity Directives, together with other supporting regulations, represents a means towards creating a fully functional internal electricity market. The same applies in the case of the Croatian electricity market.