Regulating Energy Markets, a Perspective from EU/EEA Competition and Public Procurement Law
Ignacio Hererra er forsker ved Det juridiske fakultet. Hans prosjekt ser nærmere på energilovgivningen i Europa. Prosjektet har fått midler fra AkademiaAvtalen.
Life – especially in the XXI Century – is built upon the usage of energy. In the last 50 years the energy consumption of the planet has grown sixfold. This intensive and increasing use of energy is a trend that is likely to continue - even in the face of energy efficiency increase.
In this landscape legal research is needed. The law acts as a guide, regulator and engine of policy and energy societal developments. These roles of law are partially explored and analyzed in my research project: “Regulating Energy Markets: A Perspective from EEA/EU Competition and Public Procurement Law”.
With “Regulating Energy Markets: A Perspective from EEA/EU Competition and Public Procurement Law”, I aim at combining in an interdisciplinary method legal dogmatics economics, geography and engineering for the better understanding of the legal challenges that electricity and gas markets face concerning two main areas of interest. The first one, the European Union’s decision to open up - liberalize - energy markets to competition through the implementation of the ‘energy packages’. The second one is the technological improvements. Not only renewable sources have become more efficient and cheaper, but now consumers are also producers, becoming ‘prosumers’, and its active participation by altering their demand patterns has a major impact on electricity prices and generation practices.
Areas of Study
Currently, I am focusing on three main areas of study all connected with the regulation of energy markets by regulatory, competition and public procurement law.
Comparative analysis on rules concerning transmission of electricity: Third party access and unbundling from a transatlantic perspective
- The focus of this cluster is to carry out a study concerning the antitrust regulation of electricity and natural gas markets from an EU-US comparative perspective. My analysis discusses the regulatory means employed in the US and the EU concerning the ownership unbundling process, the prevention of third-party non-discriminatory access to the distribution networks of electricity and natural gas, and the transition from a direct government regulation to a market-based system.
- For this part of the project I was very fortunate to have been the recipient of the prestigious Scholar in Residence Award by the Section of Antitrust of the American Bar Association, which allowed me to visit the US for 4 months and carry out comparative research.
Demand Response and the Winter Package 2016
- The concept of demand response refers to the changes in electricity usage end consumers – households and large electricity buyers – enter into as an answer to the changes of electricity and energy prices over time. The more expensive the electricity is in a given time, the less incentivized the end consumer is to use it. Therefore, the demand response of energy users has a positive impact concerning overall energy prices, reduction of congestion, planning for generation capacity building and overall use of electricity resources. However, despite its practical importance, demand response remains a largely unknown and under-regulated phenomenon with less than 10% of the European demand response capacity being implemented.
- The new Winter Energy Package 2016 proposed by the European Commission introduces rules concerning demand response programs. However, to make demand response programs effective and compatible with the European legal regime different hurdles and issues must be explored from an interdisciplinary legal perspective. In general, the question I seek to analyze is whether the proposed regulation is sufficient adequate and compatible with the broader EU energy and market regulation law.
Activities Exposed to Competition: A Waiver from the Utilities Directive on Public Procurement
- Public and private companies that provide public services in the field of utilities (water, energy, transport and postal services sectors) must comply with EU/EEA Public Procurement rules that discipline the way these entities acquire goods or services in the market. Unlike traditional buyers, entities involved in utilities cannot freely determine their purchasing patterns; the legislation forces them to carry out “tender procedures” to acquire goods in order to minimize discriminatory treatment towards suppliers from a different Member State and avoid corruption.
- The Utilities Directive 2014/25, nevertheless, recognizes that contracting entities acting as suppliers of these services operate in markets that can be quite competitive where there is no need for rules dictating how the purchasing process should be carried out. The Utilities Directive has, therefore, set up a mechanism through which entities subject to it may request the EU Commission and the EFTA Surveillance Authority to declare that their purchases do not need to comply with the Directive/rules, if the market in which they operate is sufficiently exposed to competition, which constitutes an example of the impact of the energy transition deregulation. In simpler terms, after this authorization is granted, these entities will no longer need to carry out public tenders and can freely decide how to acquire goods or services. Despite its practical importance, there is lack of research and literature dealing with this waiver procedure, which makes this an area ripe for research.
Activities & Project Output
- The Role (and room) of the State in Implementing Renewable Energy in Public Procurement. Energy Lab Lunch Seminar Series; 2017-02-21
- Visit of four months to the Georgetown University Law Center and the School of Law of the University of Wisconsin – thanks to the Scholar in Residence Award by the Section of Antitrust of the American Bar Association. March-June 2017
- Third Party Access and Transmission Unbundling: A Transatlantic Perspective. Global Legal Studies Seminar Series; 2017-05-25. School of Law of the University of Wisconsin.
- Unbundling in electricity transmission and distribution in the EU. Public Service Commission of the District of Columbia Seminar; 2017-06-15
- Third Party Access and Transmission Unbundling: A Transatlantic Perspective. Maryland Public Service Commission Seminar; 2017-06-12
- Recipient of the scholarship and participant of the E.ON Interdisciplinary Energy Summer Academy at the Internationales Begegnungszentrum Sankt Marienthal, Sachsen. August 2017.