Competition in Energy Markets

Energy prices have soared since 2021. Households and business face higher prices for fuel, electricity and heating. Supply problems, especially in Europe, further aggravate the situation. This has led to intensive discussions on how to limit the negative impact of high prices and how to ensure the security of supply.

In November 2022, the OECD held a roundtable to explore the reasons behind the energy price increases in 2021-2022 and present public policy discussions on how to react to it. The roundtable discussed the short and long-term challenges faced by energy markets. High energy prices and supply problems triggered a wide range of policy measures, ranging from temporarily freezing prices to taxing windfall profits.

Discussions showed that the majority of competition authorities is actively involved in identifying measures to bringing down energy prices and that there is a general wariness of reduced competition in the energy markets due to the crisis. Decarbonisation of electricity generation poses questions about the functioning of electricity markets and the role of competition in the future.

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• High energy prices are a major concern for households and businesses, but the events driving high prices are outside the remit of competition authorities. 
• Governments have introduced a range of policy measures to address market shortages and contain the impact of high prices on households and businesses.
• Competition authorities have been very active during the crisis, with some expressing concerns that the energy crisis will have a lasting effect on competition and liberalisation of energy markets.
• Many competition authorities carried out market studies to investigate price increases, especially in the fuel market.
• Decarbonising the energy sector, along with other parts of the economy, is essential to fight climate change and to transition to Net Zero. 
• Redesigning electricity markets to facilitate the Net Zero Transition is mainly a task for policy makers and energy regulators but competition authorities’ advocacy may also be required.

OECD note | Note de l'OCDE

Detailed Summary of the discussion EN | FR

Executive Summary with key findings EN | FR