This blogpost is authored by Constanze Picking, Director, Energy, Mobility and Sustainability, CERRE.
I had the pleasure of moderating the policy session “Competition or Intervention? Rethinking Market Design for a Secure and Affordable Energy Union” at the European Sustainable Energy Week (EUSEW), held at the European Commission, in June 2026. The session was hosted by CERRE in cooperation with DFC Economics.
Following an introductory presentation by Mathilde Lallemand (DG ENER, European Commission), the discussion brought together Cemil Altin (Energy Traders Europe), Isabelle Chaput (IFIEC Europe), Alberto Pototschnig (Florence School of Regulation), and Enrico Tesio (DFC Economics).
Three key messages emerged from the discussion.
1. The real debate is not markets versus intervention
At first glance, the debate may appear to be a familiar one. Yet one of the clearest messages from the discussion was that this is ultimately the wrong framing, as Europe does not face a binary choice. The future electricity system will rely on both.
Markets continue to play an essential role in coordinating resources, facilitating cross-border trade, providing scarcity signals and supporting efficient investment decisions. As several speakers noted, markets have demonstrated remarkable resilience during the recent crises, when market signals helped redirect scarce resources and maintain system balance.
At the same time, the scale of the investment challenge means that public intervention will remain necessary. Instruments such as Contracts for Difference (CfDs), Power Purchase Agreements (PPAs) and state-backed guarantees can help reduce risk and unlock investment in clean generation, grids and flexibility.
The challenge is therefore not whether to intervene, but when and how. Public intervention should complement markets, not replace them.
2. Affordability is about total system costs, not just electricity prices
One of the most interesting aspects of the discussion was the reminder that affordability cannot be reduced to wholesale electricity prices alone.
For consumers and businesses, what matters is the final energy bill. Increasingly, that bill reflects not only the cost of electricity generation but also network charges, taxes, and levies, as well as the investments required to modernise Europe’s energy infrastructure.
Several panellists highlighted that the energy transition is also a story of cost shifting. While renewable generation can reduce wholesale prices, the investments required in grids, storage and system integration create additional costs elsewhere in the system.
This does not mean the transition should be questioned. Rather, it highlights the importance of transparency. Policymakers must focus on minimising overall system costs and ensuring that costs, risks and benefits are allocated fairly across consumers, investors and public budgets.
3. Market integration remains Europe’s greatest strength
Perhaps the strongest consensus concerned the importance of preserving and deepening the Energy Union.
Many speakers warned that fragmented national interventions risk undermining the benefits of the Internal Energy Market. Different support schemes, capacity mechanisms and national approaches can create distortions, reduce liquidity and weaken competition across borders.
At a time when Europe is increasingly relying on interconnected infrastructure and shared energy resources, maintaining market integration is more important than ever.
Looking ahead
As the European Commission prepares its forthcoming White Paper on electricity market design, questions around investment incentives, risk allocation, affordability and market integration are likely to remain at the centre of the policy debate.
The discussion also served as a reminder that market design does not exist in isolation. The effectiveness of any framework ultimately depends on the broader institutional and governance structures within which it operates. This resonates strongly with CERRE’s ongoing research project, which examines whether Europe’s current energy governance framework remains fit for purpose as the Energy Union enters a new phase. The report and policy recommendations will be presented at CERRE’s event “A Letta Report for Energy: Towards a New Energy Governance Framework” on 15 October 2026 in Brussels.
Watch the recording of CERRE’s EUSEW session organised by the European Commission here.
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