Energy policy is one of the most electrifying aspects of European integration and regulation. Ever since the goals of the EU energy-policy have first been mentioned in Article 194 TFEU of the 2009 Lisbon treaty, this sector has gained ever more importance. It is remarkable, that it took the EU so long to integrate, even that the EU started as a project in the energy sector. The 1952 Coal and Steel Treaty, together with the 1957 Euratom Treaty are one of the major founding treaties of the European Community (EC). By regulating the internal market of the EU, the Commission (COM) attempts to complement the existing rules in order to ensure the functioning of the internal market. Historically, the energy markets have been organised as public owned monopolies that were operated at a national level. In these times of independent but interconnected energy networks, only wholesale transactions were possible. These transactions took place between the owners of the energy grids (Vasconcelos, 2005; Matlary 1997). Most countries saw their energy markets as an important public service that was a key strategic asset and from large geopolitical and economic importance. This lead to a reluctance of liberalizing their respective energy markets to the extent that by 1994, only seven Member States (MS) have created independent regulatory agencies (Padgett, 2011; Eberlein 2008, Bartle 2005). By introducing the energy packages, the COM hoped to achieve a more secure, competitive and sustainable energy supply for the EU. The internationalisation of the energy sector and the progressing integration of the EU required the necessity of harmonisation of laws and standardisation in this sector. Three European energy packages have been published by the COM to regulate the internal market and also to include third countries and other markets, in order to reach the common energy-related goals and climate targets. Whilst governing and harmonising the internal market, the EU has developed from being an experiment for market integration towards being one of the largest and most important economic and political global entities. This special role also implied new opportunities and consequences, such as regulatory influence towards the internal- and external market, as well as towards other economies and economic unions. Since the 1986 Single European Act (SEA), the externalisation of economic and social agendas can be observed.
Table of Contents
1. Introduction
2. The first Energy Package
3. The second Energy Package
4. The third Energy Package
5. Summary
Research Objectives and Themes
This paper examines how the European Union exerts external regulatory influence over the energy sectors of the Energy Community (EnC) countries. It explores the mechanisms of market power and governance by conditionality to explain why non-member countries choose to align their national energy regulations with the EU acquis to facilitate integration and market access.
- Evolution of EU energy policy and internal market integration.
- Mechanisms of "Market Power Europe" and externalization of regulations.
- Impact and implementation of the three European Energy Packages in non-EU countries.
- Analysis of regulatory cooperation challenges in Balkan and Eastern European states.
- The role of the Energy Community in promoting harmonized energy standards.
Excerpt from the Publication
The second Energy Package
Since the first package introduced first legal means, although non-binding, the COM continued so in the second package, which was passed in 2003. Most importantly, MS in these directives were required to create independent National Regulatory Authorities (NRAs) that should regulate the electricity and gas markets, being granted a certain set of powers, but were still required to cooperate with the COM. These should ensure that MS would fully liberalize their markets and much stricter provisions were included regarding network access regimes and unbundling of vertically integrated utilities (Cameron, 2005: p.10). Also, cross-border trade regulation was not left to be negotiated between national regulators only, but now included a specialist advisory-committee and EU institutions. Still, some MS were still reluctant to grant more regulatory powers to the COM and subsequently no mechanism was created for regulatory cooperation at EU level. This mainly lead to the establishment of the European Regulators Group for Electricity and Gas (ERGEG) which acted as an advisory body to the COM (2003/796/EC).
Summary of Chapters
1. Introduction: This chapter introduces the context of European energy policy, the shift from national monopolies to integrated markets, and the role of the Energy Community in extending EU standards to neighbouring countries.
2. The first Energy Package: This section discusses the initial 1996 directives aimed at energy market liberalisation and highlights the early challenges of regulatory incoherence and the "regulatory gap" between Member States.
3. The second Energy Package: This chapter details the 2003 initiatives, the creation of National Regulatory Authorities (NRAs), and the efforts to enhance cross-border cooperation and market unbundling.
4. The third Energy Package: This section covers the 2009 formalisation of regulatory coordination through ACER and the progress of EnC countries in transposing these requirements despite significant implementation hurdles.
5. Summary: The final chapter synthesises the findings, reflecting on the ongoing transformation of Europe's energy system towards a fully integrated model and the influence of EU governance on non-member states.
Keywords
European Union, Energy Community, Market Power, Regulatory Harmonisation, Energy Policy, Liberalisation, Unbundling, Governance by Conditionality, Energy Security, Internal Market, Third Energy Package, National Regulatory Authorities, Cross-border trade, Integration, Externalization.
Frequently Asked Questions
What is the core focus of this research?
The research explores the external regulatory influence of the European Union on the energy sectors of countries within the Energy Community and the mechanisms used to achieve this influence.
What are the primary thematic fields covered?
The paper covers EU energy market integration, the evolution of the three Energy Packages, the concept of "Market Power Europe," and the challenges of regulatory alignment in non-EU countries.
What is the central research question?
The paper asks how the concept of "Market Power Europe" explains the extent to which the EU exercises external regulatory power and why third countries comply with these regulations.
Which scientific methodology is applied?
The work utilizes a qualitative analysis of EU directives, legal frameworks, and academic literature to assess the impact of energy policy externalisation.
What is addressed in the main part of the paper?
The main part provides a historical and analytical breakdown of the three Energy Packages and their specific implications for the regulatory frameworks of Energy Community member states.
Which keywords best characterize this work?
Key terms include European Union, Energy Community, Market Power, Regulatory Harmonisation, Energy Policy, and Governance by Conditionality.
How does market size contribute to the EU's regulatory influence?
The large size of the EU single market creates a strong path dependency, providing economic incentives for smaller neighbouring economies to align their standards to maintain trade access.
What role does the Energy Community play in the energy transition?
The Energy Community serves as an institutional framework that commits its Contracting Parties to implement the EU energy acquis, thereby facilitating harmonisation and market integration.
How does the "solidarity clause" relate to energy crises?
The solidarity clause, discussed in the context of security of gas supply, reflects efforts to create a system of common energy crisis management between Member States and potentially with EnC countries.
Why has the implementation of the third Energy Package been challenging for some countries?
Implementation is hindered by political and economic elite interconnections, remaining corruption, and the difficulty of unbundling long-standing vertically integrated energy structures.
- Quote paper
- Kristen Feiter (Author), 2018, External regulatory influence of the EU in the energy sector in countries of the Energy Community, Munich, GRIN Verlag, https://www.grin.com/document/1007172
