Creating an internal market in energy: how can the tools be more effective?

Abstract:

The paper asks how the tools for the creation of an internal energy market may be made more effective. It reviews the principal legal instruments used to open up the markets in electricity and gas so far and draws some conclusions about their effectiveness. It makes some recommendations about the next steps which, in line with the new legislation's reporting requirements, will have to be proposed in 2006-06. The structure of the paper is as follows:

• Part 1 sets the scene by summarising the latest internal market measures and the problems they were intended to address;
• Part 2 critically reviews the principal instruments used so far to achieve the internal energy market objective, noting the pros and cons of each. The review is limited to three sets of instruments used to achieve the internal market goal: legislation (directives and regulations), the application of competition law and ‘soft law’ instruments, such as guidelines annexed to regulations;
• Part 3 places these three sets of instruments in the context of the framework of co-ordinated regulation set up by the Member States and the European Commission for the electricity and gas sectors, and
• Part 4 considers how these instruments might be developed to make the internal market project more effective.