Capacity Mechanisms in EU Energy Markets

Law, Policy, and Economics

Edited by Leigh Hancher, Adrien de Houteclocque, and Malgorzata Sadowska

The first point of reference for a practical and theoretical study of energy capacity mechanisms
Discusses capacity mechanisms from legal, economic, and policy perspectives
Includes eleven country case studies permitting swift comparison between different models

Capacity Mechanisms in EU Energy Markets

Law, Policy, and Economics

Edited by Leigh Hancher, Adrien de Houteclocque, and Malgorzata Sadowska

Description

Ensuring an adequate, long-term energy supply is a paramount concern in Europe. The security of a country's energy supply must be guaranteed, and within the EU individual member states are acting in order to safe-guard future energy production. Governments now intervene by encouraging investment in generation capacity, offering an additional revenue stream for conventional power plants in addition to the existing, heavily subsidized investments in renewable energy sources.

These capacity remuneration mechanisms (or simply capacity mechanisms) have become a hot topic in the wider European regulatory debate. European electricity markets are increasingly interconnected, so the introduction of a capacity mechanism in one country not only distorts its national market but may have unforeseeable consequences for neighboring electricity markets. If these mechanisms are adopted by several member states with no supra-national coordination and no consideration for their cross-border impact, they may cause serious market distortions and put the future of the European internal electricity market at risk.

These national developments are giving great cause for concern, and without a clear understanding of capacity mechanisms and their potential consequences it is difficult to predict the impact these measures will have on the internal European electricity market. This book provides readers with a thorough explanation and analysis of capacity mechanisms, written by an expert team of policy-makers, economists, and legal professionals. It will be a first point of reference for regulators and policy-makers responsible for designing optimal capacity mechanisms in Europe, and will be an invaluable resource for academics and practitioners in the fields of energy, regulation, and competition.

Capacity Mechanisms in EU Energy Markets

Law, Policy, and Economics

Edited by Leigh Hancher, Adrien de Houteclocque, and Malgorzata Sadowska

Part I: Policy
1. EU Policy on Capacity Mechanisms, Francisco Enrique Gonzalez-Diaz
2. The Regulators' View: ACER's Report on Capacity Mechanisms and the EU Internal Electricity Market, Alberto Pototschnig and Martin Godfried
3. Capacity Mechanisms in the European Market: Now, but How?, Arthur Henriot and Jean-Michel Glachant
Part II: Economics
4. Energy Market Design with Capacity Mechanisms, Jens Perner and Christoph Riechmann
5. Different Approaches for Capacity Mechanisms in Europe: Rationale and Potential for Coordination?, Fabien Roques and Charles Verhaeghe
6. Capacity Mechanisms and Cross-Border Participation: The EU Integrated Approach in Question, Dominique Finon
7. The System Adequacy Problem: Lessons Learned from the American Continent, Carlos Batlle, Paolo Mastropietro, Pablo Rodilla, and Jose Ignacio Perez-Arriaga
8. The Generation Mix, Price Caps, and Capacity Payments, Bert Willems
Part III: Law
9. Capacity Mechanisms and State Aid Control: A European Solution to the 'Missing Money' Problem?, Leigh Hancher
10. Antitrust Law: A Missing Piece in a Regulatory Puzzle?, Adrien de Hauteclocque and Malgorzata Sadowska
11. Free Movement of Goods in the Labyrinth of Energy Policy and Capacity Mechanisms, Peter Oliver
Part IV: Case Studies
12. Austria, Thomas Starlinger and Harald Kropfl
13. Belgium, Wim Vandenberghe and Rene Gonne
14. France, Daniel Crevel-Sander and Charlotte Beaugonin
15. Germany, Kai Uwe Pritzsche and Katharina Reinhardt
16. Greece, Antonis Metaxas
17. Italy, Francesco Maria Salerno
18. Netherlands, Marinus Winters
19. Norway, Jens Naas-Bibow and Catherine Ramstad Wenger
20. Poland, Malgorzata Sadowska
21. Spain, Inigo del Guayo
22. United Kingdom, Peter Willis

Capacity Mechanisms in EU Energy Markets

Law, Policy, and Economics

Edited by Leigh Hancher, Adrien de Houteclocque, and Malgorzata Sadowska

Author Information

Leigh Hancher, Professor and Of Counsel, Tilburg University, European University, Allen & Overy LP,Adrien de Houteclocque, Referendaire and Advisor, Court of Justice of the European Union and Loyola de Palacio Chair,Malgorzata Sadowska, Research Fellow, Coordinator of the Energy Law & Policy Area, Florence School of Regulation

Leigh Hancher is Professor of European Law at Tilburg University, and part-time Professor at the Florence School of Regulation. She is also Of Counsel at the Amsterdam office of Allen & Overy LLP. She is a well-known EU law expert and has counselled firms in a broad range of procedures. She is the author of numerous titles, including EU Competition and Internal Market Law in the Healthcare Sector (with Wolf Sauter, OUP 2012).

Adrien de Hauteclocque is a Legal Secretary (Referendaire) of Judge M. van der Woude at the Court of Justice of the European Union (General Court), Luxembourg, and an Adviser of the Loyola de Palacio Chair. He is the author of Market Building Through Antitrust: Long-term Contract Regulation in EU Electricity Markets (Edward Elgar, 2014).

Malgorzata Sadowska is Research Fellow at the European University Institute, working on the law and economics of energy regulation and competition policy. Since September 2013 she has been responsible for coordinating the activities of the Energy Law & Policy Area at the Florence School of Regulation, Robert Schuman Centre for Advanced Studies.
Prior to joining FSR, Malgorzata was Researcher at Tilburg Law and Economics Center (TILEC) within a project involving capacity remuneration mechanisms. She also worked at the European Commission, DG Competition, and in leading competition and public law firms in Brussels and Cologne. Malgorzata holds a PhD in Law and Economics (EDLE joint doctoral programme by the Universities of Rotterdam, Bologna and Hamburg, 2013) and Master degrees in Law (University of Gdansk, 2006) and European Studies (University of Hamburg/Europa-Kolleg, 2008).

Contributors:

Carlos Batlle, MIT
Charlotte Beaugonin, EDF
Daniel Crevel-Sander, EDF Luminus
Dominique Finon, Centre National de la Recherche Scientifique and the international Reserach Center on Environment and Development
Jean-Michel Glachant, Florence School of Regulation
Martin Godfried, Agency for the Cooperation of Energy Regulators (ACER)
René Gonne, Dechert LLP
Francisco Enrique González-Díaz, Cleary Gottlieb Steen & Hamilton LLP
Iñigo del Guayo, Universidad de Almería
Leigh Hancher, Allen & Overy LLP, Tilburg University,and the Florence School of Regulation
Adrien de Hauteclocque, Court of Justice of the European Union and the Florence School of Regulation
Arthur Henriot, RTE
Harald Kröpfl, Fiebinger Polak Leon Partners
Paolo Mastropietro, Comillas Pontifical University's Institute for Research in Technology (IIT)
Antonis Metaxas, Metaxas & Associates
Jens Naas-Bibow, Thommessen
Peter Oliver, Université Libre de Bruxelles and Monckton Chambers
José Ignacio Pérez-Arriaga, MIT
Jens Perner, Frontier Economics
Alberto Pototschnig, ACER
Kai Uwe Pritzsche, Linklaters LLP
Katharina Reinhardt, Linklaters LLP
Christoph Riechmann, Frontier Economics
Pablo Rodilla, Comillas Pontifical University's Institute for Research in Technology (IIT)
Fabien Roques, Université Paris Dauphine and Compass Lexecon
Malgorzata Sadowska, Florence School of Regulation
Francesco Maria Salerno, Cleary Gottlieb Steen & Hamilton LLP
Thomas Starlinger, Fiebinger Polak Leon Partners
Wim Vandenberghe, Dechert LLP
Charles Verhaeghe, Compass Lexecon
Catherine Ramstad Wenger, Thommessen
Bert Willems, Tilburg University
Peter Willis, Bird & Bird LLP
Marinus Winters, Allen & Overy LLP