Long-term Contract Regulation in EU Electricity Markets
Loyola de Palacio Series on European Energy Policy
The objective of this book has been to assess the antitrust strategy of the Commission on long-term contracts in decentralized electricity markets and to better understand the role of EU antitrust law in the new regulatory regime. The overarching conclusion of this book is that the Commission increasingly tends to use the antitrust laws as a quasi-ex ante regulatory tool and that this raises problems in terms of economic efficiency and legal certainty, let alone political legitimacy. This book has shown that the institutional infrastructure, which pre- exists competitive reform shapes the initial implementation of the theoretical economic model of competitive reform and creates unexpected economic or technical problems, which have to be solved ex post. In the European Union, the incomplete transition has indeed shaped the problem of long-term contracts, which appeared as a bi-dimensional problem to be tackled differently within and across Member States. However, the institutional infrastructure not only creates unexpected problems in the course of competitive reform, but also influences the dynamics of regulatory practice. The current antitrust strategy of the Commission is indeed strongly influenced by the politics of liberalization. Given the strong opposition of several Member States and the resulting deficiencies of the sector- specific regulatory framework, especially on cross-border issues, the Commission is increasingly using EU antitrust law to advance liberalization, and thus as a market building tool. This is, for instance, noticeable in its application of the essential facilities doctrine or in the way it bargains the advancement of liberalization with the incumbents through Art. 9 commitments.
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