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Abstract

The intention of a single energy market in Europe is to have a sustainable, competitive, and secure supply of energy. However, the current rise in the cost of electricity supply is affecting the competitiveness of large industrial users. This has led large electricity consumers to look for new ways to supply themselves with electricity. An important alternative to reduce power cost and avoid using electricity from the grid is self generation from a renewable energy source. The proposed paper will critically assess the adequacy of the current European regulatory framework when it comes to the use of renewable energy sources for self-producing firms. Building on such an assessment, the paper will propose modifications to the current market design, which would reduce the uncertainty for investors in RE projects and allow electricity to be self-supplied in a sustainable and cost effective ways. The regulatory framework needed for this new market design will be discussed, and special attention will be paid to self generation projects and supply management options such as distributed generation and load management.

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