Well, sometimes the house of cards works well enough long enough I think, but you have to be pragmatic about it. Energy liberalisation can only work if the innate tendency towards monopolisation on a network-bound market can be overcome somehow, which for energy is quite difficult (and why the Commission wants to have decoupling done, but I don't know if that will work well enough, it was also done in California, IIRC).

Then you'd have a functioning market, but even a functioning energy market would tend to have perverse preferences, due to the higher discount rates used by companies to evaluate investment, which creates a bias towards higher running costs away from higher front-up investment, and due to the fact that the external effects of pollution are not fully internalised.