Abstract

European energy policy, which was supposed to balance energy security, environmental sustainability and competitiveness, has left the latter objective in the shade. The uncontrolled growth in incentives to electricity generators using renewable Energy sources has led to at least two paradoxes. While a major starting point of the EU reforms of the Nineties was the attempt to create free markets, and in particular an integrated European market, this very idea has been killed by incentives. Moreover, subsidies to renewables prevent traditional plants to break even, and this may call for new subsidies.