ACC News Brief
Energy Markets Europe, United States, Japan, and Australia
Power markets dispatch reliably but leave a long-term investment gap, IEA finds
What happened
An International Energy Agency review found that short-term wholesale electricity markets across Europe, the United States, Japan, and Australia continued to dispatch power reliably as their systems changed. The markets examined securely supplied electricity more than 99.9 percent of the time over the preceding five years. Most forward and futures trading extended no more than two years, however, far short of the 10-to-30-year horizons often needed to finance capital-intensive generation, storage, and electrification.
Why it matters
Clean electricity systems need both dependable real-time coordination and credible long-term revenue signals for new infrastructure. The IEA's findings support targeted market reform, but they do not show that one design fits every grid or that its recommendations have been implemented; complementary capacity and renewable-support mechanisms can also add cost or inefficiency when poorly coordinated.
What to watch
- Reforms that deepen long-duration hedging and financing without weakening competition, affordability, or consumer protection.
- How storage, flexible demand, transmission, and distributed resources participate across short- and long-term markets.
- Measured reliability, investment, and consumer-cost outcomes after jurisdictions implement specific market changes.
Sources & evidence
- Electricity market designs must evolve to keep pace with changing system needsInternational Energy Agency launch summary dated November 26, 2025, describing findings across Europe, the United States, Japan, and Australia. The 99.9-percent figure concerns secure supply in the reviewed markets, not their decarbonization performance.
- Electricity Market Design: Building on strengths, addressing gapsIEA's 2025 cross-regional report on short-, medium-, and long-term wholesale markets and complementary policy mechanisms. Its reform conclusions are recommendations, not completed policy changes.
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