The European Commission has published a study on EU electricity markets, carried out for it by an external consultant. The study finds that fuel costs have contributed to the increase in EU electricity prices since 2003, but that wholesale electricity prices are significantly higher than would be expected on perfectly competitive markets. The differences are highest when only a few generators with available capacity are needed to meet demand, especially at peak time. The results of the study broadly support the conclusions of the Commission's Final Report of the Energy Sector Competition Inquiry, that competition in the EU wholesale electricity markets is not yet functioning effectively.

The study is a detailed analysis of the wholesale electricity markets in Belgium, Germany, Spain, France, the Netherlands, and the United Kingdom (excluding Northern Ireland) from 2003 to 2005. The study is based on a database of more than one billion points essentially provided by market operators themselves, and analyses hourly data on virtually all power plants in each market.

The study considers: (i) how many operators are effectively competing on the market on an hourly basis; (ii) the difference between what the price on some of the markets was and what it would have been if the markets had been perfectly competitive (the difference being the "mark-up"); and (iii) the relationship between the number of operators competing at a given time and the "mark-ups".