For contracts, you need contractors, and some performance delivered. Those are defined before the contracts. As part of a market, you also need to have contractors in competition. Thus, methinks, the contracts only define the actual state of the market, not the market itself.

The electricity market is defined by the electricty contracts which are concluded/transacted and settled in it. A market as I see it is a set of legal protocols which connects the market participants legally  in respect of exchanges of value ie typically transactions of electricity in exchange for money.

At present the market participants consist of producers, consumers and intermediaries, and they operate within statutory frameworks both national and Europe wide which are imposed top down.

Existing market relationships are adversarial and competitive - typically because shareholders of intermediaries aim to extract profits at the expense of producers, consumers and other intermediaries.

I believe that the market outcomes of a statutory framework, and the adversarial contracts between producers, consumers and intermediaries, will be improved by evolving this framework into a cooperative market framework through the use of a partnershipframework agreement and generic transaction registration.

In other words, producers, consumers and intermediaries alike would be members of a European Energy Trade Association with exclusive use of a European Energy Transaction Registry.

A related suggestion (concerning the need for oil market transaction registration) went down pretty well last year at the UK Treasury Select Committee when I gave evidence, and in fact Hernando de Soto is advocating something very similar in relation to derivatives..

Hernando de Soto Says Toxic Assets Emerged From a Shadow Economy - WSJ.com

To bring derivatives under the rule of law, governments should ensure that they conform to six longstanding procedures that guarantee the value and legitimacy of any kind of paper purporting to represent an asset:

- All documents and the assets and transactions they represent or are derived from must be recorded in publicly accessible registries.

In this way, we are able not only to define the market but to create a mechanism available for enforcement of market standards.

Such a European Energy Trade Association is essentially a cooperative of all users of a monopoly market - a meta-exchange if you like - which comprises all transactions however concluded, and however settled. A useful metaphor is to view the market as a universe, with the various exchanges as solar systems.

A consortium of service providers would create and operate on a Not for Loss basis the infrastructure which is necessary. Because the wishes of intermediaries are no longer paramount, it is more likely that the necessary long term strategic investments will be made, and that the market will operate in the interests of the public, rather than those of private investors.

Any necessary investment would come from direct Peer to Peer investment in market revenues (ie future user fees) or even, in due course, from the forward sale of energy itself. ie an Energy Pool. But let's not frighten the horses, eh?

The point is that there now is, I believe, an optimal legal and financial model for utility infrastructure. It consists of the Capital Partnership I first identified some 8 years ago in the context of what I called a Market Corporation, and is based upon what is essentially a Market Operating System aka a Transaction registry.

"The future is already here -- it's just not very evenly distributed" William Gibson