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[size=12.000000pt]Introduction
[size=9.000000pt]The way energy markets function and the effect of government interventions in the European Unionhas been the subject of much debate in recent years. To date however, there has not been acomplete dataset for the EU28 detailing the Government interventions in the energy market. Thisreport presents the results of a study commissioned by DG Energy to quantify the extent of publicinterventions in energy markets in all 28 Member States for all energy use excluding transport. Oneof the reasons Governments have to intervene in energy markets is that the market does notadequately price external costs such as environmental damages. In this project we also estimate themonetary value of environmental impacts from the use of energy. Finally, the study gives anindication of energy costs and prices, which is useful to provide context to the quantifications ofinterventions and external costs.
[size=9.000000pt]More specifically we report:
- Historical and current data on public interventions in the energy market in all EU Member States and the EU overall. These interventions may regard the production and consumption side ofenergy products and carriers, as well as the energy system. The focus is on those measures thatimpact energy costs and energy market prices paid by consumers in 2012. Recent developmentsin policy will have an impact on future prices but not retrospectively on 2012 prices.
- Monetary values for environmental impacts from the energy system that are not internalised inthe price. Apart from these negative impacts energy has many benefits such as employment andtax revenues. However, these benefits are private and are reflected in the prices, so unlike theimpacts we consider, these are not external.
- Energy cost data covering capital and operating costs of different electricity and heattechnologies. The cost analysis is used to put the subsidies and external costs in context. Thecost data on technologies is complemented by estimates of national energy transmission costs.Both costs and external costs will vary in future in response to changes in the energy systemsuch as a higher proportion of renewable energy, unconventional fossil fuel sources such as shalegas and/or changing energy demand and demand patterns. However, these changes are notaffecting prices now. This study explicitly does not unravel retail price compositions.
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