Sample First-Class Postgraduate EU Law Assignment
Here is an example of a first-class law essay written by a postgraduate law student at a leading UK university.
Please explain if and how the Third Energy Package contributes to the completion of the internal energy market. (how it came into EU, what is it meant to address, etc)
Regulation in the EU as a whole still remains fragmented with a patchwork of inefficient “energy islands” mostly in Baltic Eastern European states such as Latvia that are not connected to Western Europe and almost wholly dependent on Russian gas. It was only in 2007 that the Lisbon Treaty introduced measures to move towards a fully integrated EU energy market. Under Article 122, the Treaty acknowledged the EU to act in competence to ensure Member States stand in solidarity if “severe difficulties arise in the supply of certain products, most notably energy” The Treaty also dealt with the issue of energy transit under Article 170 that called for the development of much needed energy infrastructure between states to guarantee the security of supply.
The “third energy package” came into effect on 3 March 2011. The third energy package consists of two market directives, two regulations (on cross-border exchange in electricity and natural gas transmission networks) and a regulation establishing the Agency for the Cooperation of Energy Regulators. Under Article 9 of the Third Electricity Directive (2009/72) and Third Gas Directive (2009/73), all Transmission Systems and its operators were required to unbundle by 3rd March 2012 at the latest. Unbundling means separating operation and control of gas pipelines and electricity networks from producing gas or generating electricity. The 3rd Energy Package unbundling regime offered three unbundling options for Member States depending on their circumstances. These were the full ownership unbundling model, the Independent System Operator (ISO) model and the Independent Transmission Operator (ITO) model.
The “third energy package” is a legislative packet that was created to fulfil the objectives of the European energy policy, including in particular, to complete the process of developing a single competitive energy market for the entire of European Union. Implementation of this package will support liberalisation and further development of competition in gas and electricity markets, as well as improve the quality of service and security of supply. Putting the new European Union regulations into effect will result in an increased transparency of retail markets, reinforcement of the consumer protection rules and improved effectiveness of regulatory supervision exercised by independent National Regulatory Authorities.
The key aspects of the “third energy package” are 1) Effective unbundling of energy production and supply interests from the network. This should eliminate any conflict of interests between these activities. Unbundling should prevent network operators from favouring their own energy production and supply companies; 2) Increased transparency of retail markets and strengthening of consumer protection rules; 3) More effective regulatory oversight by independent market watchdogs, the national regulatory authorities 4) Establishment of the Agency for the cooperation of Energy Regulators to ensure effective cooperation between national regulatory authorities and to take decisions on cross-border issues 5) Better cross-border collaboration and investment: a new European Network for Transmission System Operators will bring together EU electricity and gas grid operators to cooperate and develop common commercial and technical codes and security standards.
In order to have effective competition the operators of transmission networks must allow any electricity or gas supplier non-discriminatory access to the transmission network to supply customers; this is the third party access principle. The conditions of access to the networks are regulated by national regulatory authorities. Transmission networks must furthermore apply regulated tariffs so as to avoid any abuse of dominance, and they must comply with specific rules on unbundling. The rules on unbundling aim at preventing companies which are involved both in transmission of energy and in production and supply of energy from using their privileged position as operators of a transmission network to prevent or obstruct access of their competitors to this network. Unbundling requires the effective separation of activities of energy transmission from production and supply interests.
Despite this, as of 2015 there have been calls by the European Commission to the European Parliament and Council to formally establish an EU Energy Union. This is due to the fact that energy regulation in the EU remains scattered with law on a regional level but with 28 different national regulatory frameworks. A fully integrated resilient Energy Union would ensure a secure supply and growth of sustainable and affordable energy and while maintaining a healthy competition energy market. The argument for an internal energy market is a simple enough one, greater integration of cross-border interconnections, the coupling of cross-border exchanges, as well as price liberalisation, will ensure improved security of supply and a smoothing of price differentials across the continent, leading to a reduction in prices.
In reality, this objective is being undermined by the level of capital expenditure required, against the backdrop of an anaemic economic recovery, and the necessary coordination of transmission operators across different states. In addition, market reality dictates that the price of energy is dependent upon a range of supply and demand conditions. This includes the geopolitical situation, import diversification, network costs, environmental protection costs, severe weather conditions, and levels of excise and taxation. In parts of Eastern Europe, meanwhile, Russia is able to maintain a stranglehold on the market and set prices.
Anders Larsen, Holm Lene Pedersen, Eva Moll Sorensen and Ole Jess Olsen, ‘Independent Regulatory Authorities in European Electricity Markets’, (2006), Energy Policy, Vol. 34, Iss. 37, p.2858-2870
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Michael Diathesopoulos. "Ownership Unbundling in European Energy Market & Legal Problems under EU Law" Piraeus Case-Law.3/2011 (2011): 248-262.
Available at: http://works.bepress.com/michael_diathesopoulos/2