We all know that Europe faces big energy challenges. The challenges of security of supply, of affordability and of decarbonisation are huge and need to be tackled hand in hand.
Our focus, as energy traders, is on how these goals are delivered. And it is our firmly held view that the energy markets which Europe has developed over the past 20 years, and the traders who work in those markets, are critical to the delivery of these goals.
These markets have proved their worth time and time again:
- In unlocking benefits for customers - The European Regulator (ACER) found the welfare gains delivered by cross-border trade, facilitated by the EU’s integrated electricity markets, to be roughly €34 billion in 2021 alone.
- In adapting to the unexpected - Energy trading acts like an early warning system for Europe. Traders react to the latest news in order to manage their risks. This flexibility, which was particularly obvious as we moved away from Russian gas, benefits everyone in Europe.
- In creating a less volatile and more stable system - Trading also acts as a shock absorber. Hedging and risk management, which are core to what traders do, are all about managing risk. This process creates stability, reduces volatility and creates a more stable overall system.
- In enhancing security of supply - Trading allows resources to be shared efficiently across borders. This means we need fewer sources of energy supply overall and can benefit from the diversity of Europe. There is strength in unity.
- In driving decarbonisation - Trading helps renewable investors finance their projects, helps the system manage intermittency and makes sure that flexible technologies are rewarded. Trading is key to reaching net zero in a cost effective way.
Energy Traders Europe has worked to improve the European energy market for the past 25 years. There is much still to be done - in improving electricity, gas and carbon markets and in creating markets for new commodities, such as hydrogen, green gases and energy attribute certificates.
