Regulation in a liberalised energy market: the new EU institutions and how they will operate
Datamonitor, June 2009, Pages: 15
The Third Energy Package has been passed (plenary session - 23/04/09). With this, a new set of regulations will come into place in Europes gas and power markets, which have the potential to radically alter the energy landscape and force utilities to reconfigure their overall business strategy.
Scope
- A concise yet authoritative analysis of how the liberalisation is set to continue within the European Unions gas and power market
- A succinct over-view of the new regulatory institutions: the roles, their powers and their mandate
- Projections for how the energy regulatory landscape is set to evolve within the EU over the next 5 years
Highlights of this title
Legally binding network codes are expected to come into place around 2014, paving the way for a simpler trading environment
ACERs actual powers will be limited but national regulatory authorities will become independent legal entities, making them stronger
M&A opportunities will become more attractive as the Third Package catalyses incumbents to dispose of transmission systems
Key reasons to purchase this title
- Understand the coming regulatory regime in European gas and power markets
- Define the role of regulators in terms of integrated approaches across the Union
- Anticipate the development of network codes and direct lobbying activities accordingly to the correct stakeholders
Overview
Catalyst
Summary
Methodology
Executive Summary
The EU has passed a Third Energy Package aimed at creating a single European energy market
The First & Second EU energy directives failed to bring meaningful competition to most EU energy markets
Market concentration is high across a majority of EU energy markets, with the exception of the B2B Power sector
M&A opportunities will become more attractive as the Third Package catalyses incumbents to dispose of transmission systems
The Third Energy Package is the culmination of many years of careful negotiation, aimed at bringing meaningful competition to energy markets
Despite the wishes of the European Parliament, the ITO option applies to both gas and electricity
Individual member states will have 18 months to choose which of the three options - OU, ISO or ITO - they will enforce
Although the issues surrounding unbundling received more political attention, the regulatory institutions contained in the Third Package will potentially do far more to liberalise energy markets
The Third Energy Package mandates for the current energy regulatory body ERGEG to be replaced with ACER
Although by no means a pan-national regulator, ACER will assume important functions in liberalising the EU energy sector
The critical regulatory objective for the EU is the creation and implementation of Network Codes but these are unlikely to be ready before 2014
A major obstacle to fuller integration and competition is the myriad different regulatory codes of conduct across EU member states
Legally binding network codes are expected to come into place around 2014, paving the way for a simpler trading environment
ACERs actual powers will be limited but national regulatory authorities will become independent legal entities, making them stronger
Annex - Environmental Developments
APPENDIX
Definitions
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
List of Figures
Figure 1: There is great variation in competition-intensity across EU power markets
Figure 2: Relative groupings of EU energy retail markets HHI by sector
Figure 3: Countries highlighted red will likely present attractive M&A opportunities in the power transmission sector in the near future
Figure 4: Third Energy Package Unbundling Options Summary
Figure 5: Timeline for development of gas codes within new EU framework
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