Manufacturing the EU Energy Markets. The Current Dynamics of Regulatory Practice

This chapter aims to analysis the new dynamics at work in EU energy regulation. Since the publication of the European Commission’s ‘Sector Inquiry Report’ in January 2007, European energy companies have felt the cold wind of competition law - many for the first time. In addition, national competition authorities (NCAs) have been actively pursuing abusive market practices - sometimes making innovative use of competition law in the process. Certain energy giants have agreed to unbundle their transmission networks - even when their national governments opposed the inclusion of ownership unbundling in the draft ‘Third Package’ of electricity and gas legislation. In parallel, the Third Package envisages the creation of a new regulatory agency - ACER - to co-ordinate technical crossborder regulatory issues in the internal market. So who will be in the driving seat in the next decade - and will co-ordinated regulatory powers be the preferred approach to market design? Will regulatory rules co-exist alongside competition based controls or will the latter gradually supersede the former? This chapter will examine these critical issues.Antitrust, Third Legislative Package, ACER, European Union

Competition on the merits in liberalised electricity markets: a regulatory reading of AG Rantos’ Opinion in Servizio Elettrico Nazionale

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Editorial Preface

This the Editorial Preface to the book "A Force of Energy", focusing on the academic career and accomplishments of Emeritus Professor Martha Roggenkamp

Editorial Preface

This the Editorial Preface to the book "A Force of Energy", focusing on the academic career and accomplishments of Emeritus Professor Martha Roggenkamp

Shift, not drift : towards active demand response and beyond

Each semester the THINK project publishes two research reports based on topics proposed by the European Commission.Topic 11QM-01-13-151-EN-CQM-01-13-151-EN-NNowadays, the European electricity systems are evolving towards a generation mix that is more decentralised, less predictable and less dispatchable to operate. In this context, additional flexibility is expected to be provided by the demand side. Thus, how to engage consumers to participate in active demand response is becoming a pressing issue. This THINK report assesses how to realise this shift towards active consumers using a consumer-centred approach and does so from the perspective of contracts. On this basis, we recommend measures to be undertaken in the short-term, during the transition and in the long term, respectively, to achieve a full take-off of active demand response. The THINK project (2010-2013) is funded by the European Commission under the Seventh Framework Programme, Strategic Energy Technology Plan. (Call FP7-ENERGY-2009-2, Grant Agreement no: 249736). Coordinator: Prof. Jean-Michel Glachant and Prof. Leonardo Meeus, Florence School of Regulation, Robert Schuman Centre for Advanced Studies, European University Institute

How to make the EU Energy Platform an effective emergency tool. Policy Contribution Issue n˚10/22 | June 2022.

Uncertainty about the supply of Russian natural gas is causing extremely high and volatile European gas and electricity prices. European Union countries may struggle to import sufficient volumes of natural gas at reasonable prices. During the summer, the imperatives are to fill storage sites sufficiently in a coordinated manner and to organise sufficient import volumes to replace a substantial share of gas that might no longer come from Russia. Coordination is essential to ensure that disruptions during difficult winter months do not lead to a break-up of the EU internal gas market with potentially serious political repercussions. One part of the EU response is establishment of an EU Energy Platform for the purchase of gas, LNG and hydrogen. This aims to pool demand to leverage the bloc’s economic clout, international outreach to reliable partners and efficient use of existing infrastructure. EU leaders have backed the plan but it has not yet been translated into a feasible scheme. The platform should be developed into an effective emergency tool to safeguard gas supply in case Russian flows stop. We detail two complementary proposals to achieve this. First, there should be EU-wide auctioning of remuneration for filling storage sites in specific regions. Companies would remain responsible for all stages of the value chain, benefitting from remuneration and in return offering the market operator some control over how this gas is released during winter months. Second, EU demand for additional LNG quantities, and the sourcing of this on international markets, should be coordinated through a platform, creating a transparent market for these volumes. These mechanisms would resolve the prevention paradox and prevent free-riding. If EU countries buy gas jointly, they will find it much easier to let markets allocate scarce volumes across borders in case of a complete stop to Russian supplies. . This would reduce the risk of energy market fragmentation, as well as the subsequent energy security, economic and political impacts of a shock that would hit member states very differently

The 5th EU electricity market reform : a renewable jackpot for all Europeans package?

We think that the electricity markets that were developed over the last two decades did what they were supposed to do during this crisis: through higher prices, they convey the message that energy is scarce. “Shooting the messenger” is not going to remove the problem. However, we also learned a lot during this crisis on how electricity markets can be completed and complemented with regulatory instruments, which is why we have three recommendations: First recommendation: Enable and incentivize consumers and suppliers to hedge via well-functioning forward markets (which would complete the sequence of electricity markets). Second recommendation: Give consumers access to cheap renewables with Contracts for Difference (CfDs) and Power Purchase Agreements (PPAs) that are compatible with short-term markets. Third recommendation: De-risk the investments in energy resources AND mitigate affordability concerns for consumers by redesigning Capacity Remuneration Mechanisms (CRMs) or by complementing these mechanisms with other regulatory tools. We finally observe that a broader reform could also aim at accelerating the innovations on the consumers’ side envisioned by the Clean Energy Package. These innovations can bring the much-needed flexibility in decarbonized energy systems

Energy policy ideas for the next European Commission : from targets to investments

Energy (and climate) will be high on the agenda of the next European Commission. EU citizens and industry expect a supply of energy that is affordable, secure, and sustainable. The National Energy and Climate Plans suggest that there is a widening gap between what Member States are willing to commit to at the national level, and what they think the European Union should achieve collectively for investments in energy efficiency and renewable energy. We run the same risk for the EU targets for clean tech manufacturing, and for critical raw materials extraction, processing and recycling. To address the gap, the next European Commission could: make Member States more accountable to live up to their national investment potential for energy efficiency and renewable energy; promote multilateral cooperation (and solidarity) among Member States for network infrastructure, resource adequacy and flexibility; strengthen the management of our global dependencies; and reinforce the EU institutional setup. Ideas to achieve these objectives include: an EU Energy and Climate Plan with investment progress tracking and recommendations for Member States; the modernization and Europeanization of capacity mechanisms; an upgraded European Resource Adequacy Assessment exercise beyond electricity and adequacy; a top-down EU networks vision; more EU funding and more powers for EU entities to allocate costs among Member States; more capacity building for national administrations; a reinforced ACER; a merger of the ENTSOs and ENNOH (and the EU DSO Entity) into a EU Energy Networks Entity; the creation of an EU Energy Agency (and an EU framework for national energy agencies). At FSR, we think these ideas merit a more thorough discussion, and we look forward to contributing to that discussion in the coming months