With the European Energy Council expected to approve its Conclusions on the Internal Energy Market (IEM) on 7 June, the feature article this month is on the Regulators magic formula for making the IEM work (see the CEER response to the European Commission’s IEM Communication). CEER is hopeful that efforts to fight VAT fraud are paying off (see March edition for recent anti-VAT fraud activity of 9 EU energy bodies) - the Council is now expected to adopt legislation to fight VAT fraud soon.
CEER has published its Blueprint on Incremental Gas Capacity ahead of the CEER-ACER workshop (3 June). Other events coming up in Brussels include the CEER Customer Conference (19 June), an event during EU Energy Week on delivering 2020 targets cost-effectively (25 June), and one on enhancing the retail market functioning (26 June).
Finally, CEER is currently consulting on its draft 2014 Work Programme.
The magic formula for making the Internal Energy Market work
In November 2012, the European Commission presented its Internal Energy Market (IEM) Communication. In the run up to the Energy Council (7 June), CEER published its position paper on making the IEM work. In it, regulators emphasise: • the role of effective and independent energy regulation; • the central importance of full implementation of the 3rd Package of laws; • the possible distortionary impact of regulated energy prices; • the fundamental priority of consumers’ interests; • the key role of distribution system operators; and • the critical need to ensure generation adequacy.
How can Europe realise its competitive, sustainable and efficient market objectives? CEER believes that the legal framework is in place. But, the lack of full implementation of existing legislation remains the main obstacle for the completion of the IEM. Regulators believe that full and timely transposition of the 3rd Package is the magic formula allowing electricity and gas markets to reach their full potential. As the integrity and transparency of energy markets are essential to promote a level-playing field for all, regulators also see it as essential that the Regulation on wholesale energy market integrity and transparency (REMIT) is implemented effectively in parallel.
Contributing to transition to IEM of the future CEER believes that fast implementation of the European target models for electricity and gas will enhance the internal market, by stimulating efficient cross-border use of existing generation and creating incentives for new investments. Smart networks, the role of DSOs and the need to assess and ensure generation adequacy are key factors contributing to the transition to the IEM of the future. CEER sees coordinated efforts at all levels, including implementing the Electricity and Gas Target Models, tapping the goodwill of market participants through the Regional Initiatives and supporting investments in needed infrastructure as also critical to achieving our overall goals.
What is the role of energy regulation? Energy regulation has an important part to play in ensuring we can deliver Europe’s energy goals, in particular by overseeing market developments and providing sound and predictable regulatory policy. Predictable and reliable regulation is a key factor in building investor confidence.
Why does CEER champion competition and benefits to consumers? A competitive, secure European energy market is not a goal in itself, it should deliver benefits for energy customers. A strong regulatory framework is central to efficient functioning markets. CEER has long advocated for the phase-out of regulated prices due to their possible distortionary effects. Regulators promote and support the development of competitive markets, with minimal interventions and distortions to price formation.
What's next? CEER is currently consulting on its draft 2014 Work Programme which has a strong focus on consumer benefits of the IEM, and on steps towards making the CEER-BEUC 2020 customer vision a reality. Support for the Vision continues to grow. Currently 14 energy stakeholders have formally declared their support for it, 6 of whom will present testimonials on what they are doing to make the Vision a reality at our 19 June Customer Conference.
• CEER response to the European Commission’s Internal Energy Market Communication • CEER Blueprint on Incremental Capacity • CEER draft 2014 Work Programme
A CEER/European Commission Eastern Partnership Workshop takes place (18-19 June) in Georgia. The organisers of the 2015 World Forum on Energy Regulation are seeking suggestions for topics (see www.wfer2015.org).