A European Energy Union will ensure secure, affordable and climate-friendly energy for citizens and businesses as European energy policy aims to give Europe's citizens access to competitive, secure and sustainable energy supplies. Using energy more wisely and fighting climate change is not only an investment in our children's future, it will also create new jobs and growth and the creation of a energy market to each of these elements.

Integrated markets bring competitive pressure to a sector which has historically been characterised by national markets often dominated by incumbents. Integrated markets allow consumers to benefit from a pan-European choice of diverse energy resources. In addition, harmonised cross-border market operation together with strong and efficiently operated networks will give the depth needed to allow the integration of new renewable energy sources at least cost.

Companies trade based on agreements to physically deliver electricity and gas (either bilaterally or using power exchanges), and using derivatives products based on prices on a power exchange or a pool. For market participants these two types of trading are economically equivalent – a Contract for Difference based on a reference price on a market or energy pool fulfills the same function as a contract for the sale or purchase of energy. Both organised market places and OTC platforms are used to trade in products based on physical delivery and in derivative products. As the majority of trade in the main EU markets is brokered on the OTC markets where 74% of total traded volumes is traded in derivatives. The underlying contracts are equivalent in economic terms, is likely to immediately impact prices on all other trading platforms or the price level of bilateral transactions.