With the financial crisis evolving into a severe,
global economic recession, there have been
growing doubts over whether energy markets can
continue to operate efficiently under present
conditions or whether the shift to non-market
mechanisms would be a better choice. This
question remains an ongoing source of debate in
the recently liberalised electricity sector.
Textbook wisdom says that the market is the most
efficient place to allocate financial means for
investments. Therefore, during a period of a crisis,
it should follow that we actually need more market
mechanisms, not fewer, if we want to stimulate
investments in an economically efficient way.
Regulated electricity prices and nationalistic
thinking will not help to solve Europe’s electricity
challenges with regards to either the generation or
the transportation of electricity.