Author: George HACERIAN, Research Analyst, Green eDIH
In 1987, with the revision of the Treaty of Rome through the Single European Act, the European Commission, under the visionary leadership of Jacques Delors, introduced for the first time the idea of a common energy space. The oil crises of previous decades and the growing environmental concerns led European leaders to rethink the Union’s energy security model.
Delors, together with the then Commissioner for the Environment, Carlo Ripa di Meana, laid the foundations of a new vision: energy could no longer be addressed solely at the national level. A coordinated approach was needed, based on interdependence, solidarity, and economic integration.
Since then, Europe has made important strides toward market liberalisation and network interconnection, but fragmentation persists. In 2025, the project of an internal electricity market remains unfinished. At a time when the Union faces climate, geopolitical, and industrial pressures, real market integration is no longer just a political promise, but a strategic necessity.
Today, in the context of the transition to renewable sources and ongoing geopolitical challenges, integration of the European Union’s electricity market remains a vital objective. Although significant progress has been made, there are still obstacles to overcome in order to ensure a truly unified energy market, which can effectively meet the needs of European citizens.
The Promise of Integration
A truly integrated European electricity market promises clear benefits: lower prices, better use of renewable resources, and increased energy security. According to the IMF, market integration could generate savings of up to €40 billion annually, also contributing to the competitiveness of European industries compared to the US or China.
The European Commission supports this direction through electricity market reforms and the Affordable Energy Plan, emphasising the need for flexibility, interconnection, and investment in smart grids. Organisations such as Energy Traders Europe and Eurelectric are calling for the rapid implementation of reforms and forward markets, as well as for the stimulation of long-term contracts, which are essential for investments in green energy.
Market integration is not just an economic goal, but a condition for renewable sources to become the backbone of the European energy system. Solar or wind surpluses from one region must be able to meet demand in another, within a flexible, connected, and well-regulated system. Although the technical mechanisms exist, their application remains uneven, and the benefits of integration are felt differently across regions.
Persistent Fragmentation
Although market integration is supported in principle by European institutions, the reality shows an energetically fragmented Europe. Differing regulations, national interests, and the lack of a shared vision slow progress. Germany, for example, refuses to divide its internal market into bidding zones, even though it would reduce grid congestion and balance regional prices. Authorities and industry in Germany fear that such a measure would lead to price increases and instability. Other states worry they will become dependent on imports or lose control over their own capacity mechanisms.
ACER confirms that, although progress has been made in some regions, the benefits of integration are unevenly distributed, and regulatory barriers persist. At the same time, the implementation of the 2023 market reform is moving slowly, and actors such as Energy Traders Europe warn that legislative uncertainty weakens market liquidity and undermines investor confidence.
Political fragmentation, lack of coordinated investment, and some states’ refusal to give up national control block an effective energy transition. The longer these barriers persist, the more the EU’s chances of delivering affordable, clean, and secure energy to all its citizens erode.
The Infrastructure Factor: Integration Needs Networks
The integration of the European electricity market cannot be achieved without solid physical infrastructure. Current networks are often outdated, undersized, and insufficiently connected, which limits the efficient flow of energy between Member States. According to Allianz Trade, the EU needs over €2.3 trillion in investments by 2050 for modern electrical grids. ACER warns that without expanding and modernising existing networks, cross-border capacities will continue to be underused, and system efficiency will stagnate.
Strategic projects such as e-Highway2050 propose a European “supergrid” capable of redistributing renewable energy where it is needed. At the same time, partnerships like the one between Hydro and NKT show that the private sector is beginning to support infrastructure development through low-emission technologies.
Regional initiatives, such as the synchronisation of the Baltic countries with the European network or the energy islands in the North Sea, demonstrate that interconnection is possible and brings real benefits. However, the current pace of investment remains insufficient. Without a common strategy and accelerated funding, European infrastructure will continue to slow down the integration process.
Renewable Energy and Resilience
Europe’s energy transition depends on market integration and the ability of networks to manage variable renewable sources. In 2024, solar and wind energy generated 35% of the EU’s electricity, but the lack of grid flexibility means that gas and coal remain essential during peak periods or when the sun and wind are absent. Events such as “dunkelflaute” in Germany, when prices reached nearly €1,000/MWh, show how vulnerable the system is without effective balancing mechanisms. The solution: an integrated market, where surplus from one country can cover shortages in another.
The European Commission is proposing measures for flexibility and digitalisation, such as dynamic tariffs, battery storage use, electric vehicle integration, and consumption automation through smart grids. Accordingly, Energy Traders Europe also highlights the role of long-term contracts (PPAs and CfDs) in stabilising the market and attracting investment in renewables. Digitalisation, through artificial intelligence and real-time monitoring, will be essential for a system that can adapt. Market integration is, therefore, the condition for renewable energy to become not only available but also reliable. Without coordination, Europe risks losing the advantages of its own green potential.
A Geopolitical Stake
The integration of the electricity market is increasingly viewed as an essential component of European energy security. The war in Ukraine accelerated the EU’s move away from Russian energy and highlighted the importance of a well-connected internal system.
In 2025, Estonia, Latvia, and Lithuania disconnected from the BRELL system controlled by Russia and synchronised with the EU grid—representing both a symbolic and strategic step for regional energy independence. The European Commission has linked this direction to the Affordable Energy Plan, which foresees more efficient interconnections, diversification of sources, and the digitalisation of the energy system.
At the same time, the EU and Switzerland signed an agreement to integrate their electricity markets, and projects like Denmark’s energy islands will connect multiple countries through offshore wind networks. These initiatives contribute to Europe’s strategic autonomy, reducing vulnerability to external shocks and offering a model of regional cooperation. Market integration thus becomes not only an economic reform, but a pillar of the Union’s geopolitical resilience. In an increasingly unstable world, Europe’s ability to efficiently distribute its energy, coordinate its policies, and protect its infrastructure becomes a matter of both energetic and strategic interest.
From Vision to Action
The vision is clear, the benefits are proven, and the urgency, driven by climate, geopolitical, and economic crises, can no longer be ignored. Nevertheless, the gap between political objectives and actual implementation remains significant. National interests often block the harmonisation of regulations. Infrastructure development, though underway, is not keeping pace with the rate of electrification, and the lack of firm political consensus risks delaying essential reforms for the decarbonisation of the European economy.
Integration is not a final destination but a continuous process of evolution that requires coordination on multiple levels: between Member States, between authorities and industry, and between long-term climate policies and immediate energy needs. As shown by ACER, the European Commission, and Energy Traders Europe, the technical tools and legislative framework already exist. What is missing is a clear political will to apply them. At the same time, it is evident that integration is not an end in itself but a means through which Europe can achieve its fundamental goals: access to fairly priced energy, a swift transition to renewable sources, greater energy security, and a globally competitive economic position.
In this complex landscape, actors like Green eDIH can actively contribute, not only as innovation drivers but also as bridges between European policies and the real needs of the economic environment. By supporting SMEs and local administrations in adopting digital solutions for energy efficiency, by developing AI-based tools for optimising consumption and forecasting demand in decentralised networks, by building skills in sustainability and digitalisation among industry professionals, and by facilitating collaboration between technology providers, startups, and authorities, Green eDIH becomes a real catalyst of Europe’s energy transition.
However, systemic change cannot depend solely on such initiatives. A clear direction at the European level, bold investments, and political leadership are needed. Europe does not need a new strategy, it needs the courage to carry through the one it already has.
