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The various electricity markets in Europe are growing ever closer. At various different levels, countries are working together to strengthen cross-border energy security and build strong electricity markets for the future. After all, the energy transition will only work out if it is broached using a pan-European approach. A great deal of progress has already been made on cross-border cooperation, but the task of adjusting the energy policies of individual countries in Europe to bring them into line with one another is rather a complex one.

Two years ago, Germany initiated the formation of a group called the ‘electrical neighbours’ – neighbouring countries that want to strengthen their cooperation on electricity. Austria, Belgium, the Czech Republic, Denmark, France, Germany, Luxembourg, the Netherlands, Norway, Poland, Sweden, and Switzerland have all joined this group. In July, representatives of all these countries came together for a meeting of the electrical neighbours in Berlin.

Flexible and joined-up electricity markets for high levels of energy security

At July’s meeting of the electrical neighbours, discussions centred on how our electricity supply and demand can be made more flexible. This is because the more we rely on renewables, the more we need our energy industry to be flexible. In future, the amount of electricity that is available won’t solely depend on demand anymore. The amount of power that is being generated from renewables at a given time will also play a key role in this. And this will have an effect not only on individual countries’ electricity markets, but on European cross-border trade in electricity, too.

If we are to successfully balance supply and demand in future, we will need to engage in more cross-border trade in electricity. National grid operators will have to increasingly coordinate with one another more closely if they are to achieve high levels of grid stability. And different national governments will also need to cooperate more, to ensure that the right framework is put in place.

Close dialogue between the electrical neighbours

The electrical neighbours all agree that both the supply and demand sides need to become more flexible. In order for this to work, a suitable framework needs to be put in place for the electricity markets. This will first require some remaining hurdles to be cleared. Free price formation and free and unhindered market access for all players are absolutely key.

Enhanced cooperation between the penta states

The Pentalateral Energy Forum also seeks to render the electricity markets more flexible. This forum was established more than 10 years ago and brings together the countries of Austria, Belgium, France, Germany, Luxembourg, the Netherlands, and Switzerland. The smaller size of the group, compared to that of the electrical neighbours, allows for more specific action on flexibility to be prepared in detail. The seven members seek to align their interests with those of the larger group of twelve electrical neighbours – as far as possible.

Delivering energy security at affordable prices – the EU Energy Union of 28

Beyond the Pentalateral Forum and the electrical neighbours, there is also the Energy Union, which brings together all 28 EU Member States. The Energy Union is a blanket term for all EU energy projects that seek to guarantee energy security, a sustainable supply of energy, and a competitive and affordable supply of energy.