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(Re-)Designing the internal market for electricity

11-04-2017

The IA appears to present a good and comprehensive analysis to identify the problems in the status quo, define the objectives of EU action, delineate policy options that can fulfil those objectives, assess the impacts of those options, and choose the best options to address the identified problems. This process seems to be based on sound data and research. In the explanation of the objectives, however, the distinction between what the IA refers to as the sub-objectives and the operational objectives ...

The IA appears to present a good and comprehensive analysis to identify the problems in the status quo, define the objectives of EU action, delineate policy options that can fulfil those objectives, assess the impacts of those options, and choose the best options to address the identified problems. This process seems to be based on sound data and research. In the explanation of the objectives, however, the distinction between what the IA refers to as the sub-objectives and the operational objectives does not appear to be very clear, raising doubts as to whether the sequential process required in the better regulation guidelines has been followed. Finally, the IA’s length and complexity somewhat limit its accessibility, although the sixteen page abstract added in response to the Regulatory Scrutiny Board’s recommendation goes some way towards addressing this issue.

Overview of the internal energy market design legislation

23-01-2017

The new proposals build on previous legislation and continue to gradually implement an internal energy market. In particular, they look to incorporate recent changes, such as the rapid increase in renewables and technological advances relating to the digitalisation of services. They also attempt to clarify previous legislation such as in the case of storage for Transmission System Operators (TSOs) for example. As with the recent proposals on security of gas supply, the Commission looks to incorporate ...

The new proposals build on previous legislation and continue to gradually implement an internal energy market. In particular, they look to incorporate recent changes, such as the rapid increase in renewables and technological advances relating to the digitalisation of services. They also attempt to clarify previous legislation such as in the case of storage for Transmission System Operators (TSOs) for example. As with the recent proposals on security of gas supply, the Commission looks to incorporate a regional approach as the default option for assessing needs and mitigating risks. The Commission's evaluation, as well as the review of the implementation process, have shown that, while progress has been made, challenges to create a properly functioning internal market remain. The challenges identified by the evaluation, such as price controls, insufficient cross-border trade, uncoordinated national interventions and issues around regulatory independence, are addressed by the current proposals. However, it is also clear from the evaluation that progress towards a well-functioning and competitive energy market has not been consistent across the EU. Where progress has been made, the effects have been positive, although the evaluation does not look at examples of best practice to assess the best way forward. The EU- wide oversight of national regulators and TSOs is seen as positive, but question marks remain in terms of whether the suggested changes will be sufficient. Several reviews on the topic have noted that the Agency for the Cooperation of Energy Regulators (ACER) lack sufficient powers to be effective and it is unclear whether the current proposals will properly address this issue. The public consultations also pointed to the dual role of the European Network for Transmission System Operators for electricity (ENTSO-E), as both a lobby organisation and a representative of public interest,  as potentially problematic. The creation of a European Distribution System Operator (DSO) could possibly duplicate this issue. The evaluation does not include any assessment around infrastructure legislation or the EU's role in this area; however, it notes that the incentives for private investments have been insufficient so far. It is hoped that the proposed moves to a more flexible and price-driven market should improve investment conditions. As reforms in this area have been ongoing since the 1990s, it will be particularly important to continue to monitor progress and to what extent the new proposals increase competition and a well-functioning, price-led market. In terms of the Parliament's demands, many of its requests are reflected in the proposals, such as calls for more regional cooperation, for example. They do not, however, include a review of the gas market or interconnectivity objectives differentiated by regions; nor do they look to address to any great extent the issue of external import. In the case of the ACER, Parliament had asked for a substantial increase in resources. While the proposals strengthen the agency's position, the Commission decided not to propose making the ACER into a pan-European regulator, with the increase in budget and staff that such a move would have entailed.

Energy Union: Key Decisions for the Realisation of a Fully Integrated Energy Market

24-05-2016

The aim of this study Energy Union: Key Decisions for the Realisation of a Fully Integrated Energy Market is to assess whether, and to what extent, the EU’s internal energy market objectives can effectively and efficiently be reached with the current policies and instruments. Link to the original publication: http://www.europarl.europa.eu/RegData/etudes/STUD/2016/578968/IPOL_STU(2016)578968_EN.pdf

The aim of this study Energy Union: Key Decisions for the Realisation of a Fully Integrated Energy Market is to assess whether, and to what extent, the EU’s internal energy market objectives can effectively and efficiently be reached with the current policies and instruments. Link to the original publication: http://www.europarl.europa.eu/RegData/etudes/STUD/2016/578968/IPOL_STU(2016)578968_EN.pdf

Parlamendiväline autor

Koen Rademaekers and Luc Van Nuffel (Trinomics)

Improving the security of energy supply by developing the internal energy market: more efforts needed (European Court of Auditors' Special Report No 16/2015) - Implementation in Action

13-04-2016

The Court of Auditors' report found that although progress had been made, the objective of completing the internal energy market by 2014 had not been reached, and that more and better targeted infrastructure initiatives were needed. A generally broad agreement exists between ECA and the European Commission about what the priorities are to increase the effectiveness of the internal energy market, i.e. increase regional cooperation, improve cross-border capacity and review ACER's powers. The European ...

The Court of Auditors' report found that although progress had been made, the objective of completing the internal energy market by 2014 had not been reached, and that more and better targeted infrastructure initiatives were needed. A generally broad agreement exists between ECA and the European Commission about what the priorities are to increase the effectiveness of the internal energy market, i.e. increase regional cooperation, improve cross-border capacity and review ACER's powers. The European Commission's Energy Union framework will be the main instrument to increase implementation, strengthen European cooperation and harmonise standards across energy networks. However, given that the composition of the energy market is within the remit of Member States, their individual priorities will also influence any Europe-wide efforts. While agreeing with ECA that an EU-level infrastructure needs assessment was important, the European Commission did not see the need to bring more analytical capacity in-house. In terms of funding, while more rigorous funding criteria will come into force in 2016, the European Commission disagrees with ECA that legislation is needed to ensure that key infrastructure projects benefit the internal market, arguing that flexibility in EU funding is key to success. Given that most legislative proposals planned for Energy Union have yet to come, it will be important to monitor to what extent these initiatives meet the concerns outlined by ECA in this report and reflect the demands made by Parliament in its recent resolutions.

Energy Union: Key Decisions for the Realisation of a Fully Integrated Energy Market

15-03-2016

This study, provided by the Policy Department A at the request of the ITRE Committee gives an overview and analysis of the main EU policies, measures and instruments that contribute to the realisation of fully integrated and well-functioning electricity and gas markets in Europe. Detailed case studies explore capacity remuneration mechanisms, electricity market coupling, and cross-border gas trade between Hungary and its neighbours. Policy recommendations to improve the effectiveness of the integration ...

This study, provided by the Policy Department A at the request of the ITRE Committee gives an overview and analysis of the main EU policies, measures and instruments that contribute to the realisation of fully integrated and well-functioning electricity and gas markets in Europe. Detailed case studies explore capacity remuneration mechanisms, electricity market coupling, and cross-border gas trade between Hungary and its neighbours. Policy recommendations to improve the effectiveness of the integration process are formulated based on the key findings.

Parlamendiväline autor

Luc VAN NUFFEL (Trinomics), Koen RADEMAEKERS (Trinomics), Jessica YEARWOOD TRAVEZAN (Trinomics), Maaike POST (Trinomics), Onne HOOGLAND (Trinomics) and Pepa LOPEZ (Aether)

Post-2020 reform of the EU Emissions Trading System

14-03-2016

In July 2015, the European Commission proposed a reform of the EU Emissions Trading System (ETS) for the period 2021-30, following the guidance set by the October 2014 European Council. The proposed directive introduces a new limit on greenhouse gas (GHG) emissions in the ETS sector to achieve the EU climate targets for 2030, new rules for addressing carbon leakage, and provisions for funding innovation and modernisation in the energy sector. It encourages Member States to compensate for indirect ...

In July 2015, the European Commission proposed a reform of the EU Emissions Trading System (ETS) for the period 2021-30, following the guidance set by the October 2014 European Council. The proposed directive introduces a new limit on greenhouse gas (GHG) emissions in the ETS sector to achieve the EU climate targets for 2030, new rules for addressing carbon leakage, and provisions for funding innovation and modernisation in the energy sector. It encourages Member States to compensate for indirect carbon costs. In combination with the Market Stability Reserve agreed in May 2015, the proposed reform sets out the EU ETS rules for the period up to 2030, giving greater certainty to industry and to investors. In the European Parliament, the ENVI Committee takes the lead on the proposal, while it shares competence with the ITRE Committee on some aspects. This briefing updates an earlier edition, of September 2015: PE 568.334. A more recent edition of this document is available. Find it by searching by the document title at this address: http://www.europarl.europa.eu/thinktank/en/home.html

The Cost of Non-Europe in the Single Market. Part II - Single Market for Services

24-09-2014

Cost of Non-Europe Reports identify the possibilities for economic or other gains and/or the realisation of a ‘public good’ through common action at EU level in specific policy areas and sectors. This Cost of Non-Europe Report seeks to analyse the costs for citizens, businesses and relevant stake-holders of remaining gaps and barriers in the European Single Market, building on and updating the 1988 Cecchini Report, which quantified its potential benefits. This particular study - the second in a series ...

Cost of Non-Europe Reports identify the possibilities for economic or other gains and/or the realisation of a ‘public good’ through common action at EU level in specific policy areas and sectors. This Cost of Non-Europe Report seeks to analyse the costs for citizens, businesses and relevant stake-holders of remaining gaps and barriers in the European Single Market, building on and updating the 1988 Cecchini Report, which quantified its potential benefits. This particular study - the second in a series - attempts to take stock of the remaining gaps or deficits in intra-EU market access obligations in services, and the related deficits in the proper functioning of the internal market for services. It also tries to identify the quantitative and qualitative economic gains of overcoming the costs of non-Europe of the remaining fragmentation, insofar as the EU can address such deficits.

International Relations and Security of Energy Supply : Risks to Continuity and Geopolitical Risks

02-02-2007

Is European dependency on energy imports just another part of the global division of labour creating mutual benefits for both importing and exporting countries or does this situation constitute a strategic threat to European independence and economic growth ?

Is European dependency on energy imports just another part of the global division of labour creating mutual benefits for both importing and exporting countries or does this situation constitute a strategic threat to European independence and economic growth ?

Parlamendiväline autor

Jan Horst KEPPLER (University of Paris–Dauphine ; French Institute for International Relations - IFRI)

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