Nouvelle Europe special dossier - Energy in the EU

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December 2017

VOL. 4 Nouvelle Europe dossier

Energy in the EU - as seen from Natolin -

This issue includes : Foreword by Francis Masson

The Pentalateral Energy Forum: Inter-connector of European powers by Ronan Haas

European Energy security: a clash of representations by Francis Masson

Moldova and Ukraine from East to West: Increased implementation of European norms for a more secure eastern energy market by Alexandrina Robu

The European Renewable Energy Markets by Lucia Quaglia


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Nouvelle Europe is an international and interdisciplinary organization founded in Paris in 2003, the year before a number of countries from Central and Eastern Europe (CEE) joined the European Union. It has since then continuously organized conferences and simulation seminars in various countries on topics surrounding CEE and its relations to the EU. Nouvelle Europe’s online-journal has been active since 2006, providing informed analyses and original reflections often on the basis of recent academic research and internally reviewed with an active team. Contacts Balåzs Gyimesi, President

balazs.gyimesi@nouvelle-europe.eu

Inga Chelyadina, Treasurer

inga.chelyadina@nouvelle-europe.eu

Andreas Pacher, Editor-in-Chief

andreas.pacher@nouvelle-europe.eu

Philippe Perchoc, Founder

philippe.perchoc@nouvelle-europe.eu

The present dossier was organised by Francis Masson.

Cover: Energy quadryptique by Francis Masson.

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Contents

Forewords: Energy in the EU as seen from Natolin...................................................................... 6 European Energy security: a clash of representations ................................................................. 8 The European Renewable Energy Markets ................................................................................ 16 The Pentalateral Energy Forum: Inter-connector of European powers...................................... 22 Moldova and Ukraine from East to West: Increased implementation of European norms for a more secure eastern energy market ......................................................................................... 26

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Forewords: Energy in the EU as seen from Natolin Francis Masson

On 24th November, the European Commission released the “Third Report on the State of the Energy Union, the latest result of a regular self-assessment and communication exercise on the European Union’s institutions’ and the Member States’ progresses in integrating common energy policies at a supranational level. Energy is everything. It is everywhere. As a political issue, it touches upon every aspect of the citizen’s life. It is one of the most existential policy issues for a state. It matters for households, for the industry, for the climate and the environment. Energy policy - like Defence policy - is regarded as one of the most sensible domains of any state because it is fundamentally linked with vital security: no leader can afford the political cost of a failed energy policy. A blackout of electricity or a shortening of gas supply will affect households directly. This will then negatively influence their electoral behaviour. Energy resources (mostly oil and gas) are among the most traded goods on the world market. Moreover, the idea of a global competition for resources is part of the general public views on energy issues. Indeed, energy is strategic for all economic activity. Energy and environment, as political, economic and societal issues, are intertwined. 80% of the world CO2 emissions are related to energy. At the European level, the environmental policy is more integrated than the energy one. Energy policies have been intertwined with European integration process from the beginning on, arguable with the creation of the European Atomic Energy Community as early as 1957. Since the 2000s, the need to unify national energy policies and to overcome the fragmentation of the European energy profile has been acknowledged in light with the instability of the world energy market. 2009 has been a decisive turning point in the legislative integration process of European energy with the promulgation of the so called Third Energy Package and the entry into force of the Lisbon Treaty. Finally, energy policy has an explicit provision in the primary law of the EU (Article 194 TEU). Last but not least, energy is (one of the) key priorities of the Juncker Commission. Energy has become so vital to the European integration process that the Commission’s “Framework Strategy” of the completion of the Energy Union of 25th February 2015 introduced a notion of freedom of movement of energy, intending to extend the four freedoms guaranteed by the European Treaties. The topic of energy embodies the sophistication of European Interdisciplinary Studies. To seize the complexity of this policy field, the observer must be sensible as much to the legal, economic and political aspects of the public debates on energy. Whose gas should we import? Through which pipeline? Should we go for the cheapest option, or for the safest in term of long term supply? Can we trust today's economic partner to be a good supplier tomorrow, when the political trust is already gone? Are we ready today to take on the political risk of a shortcut of electricity production, in order to make sure that our children’s energy mixes will be ‘’clean’’? Those are some of many questions that experts, scholars and students raise when discussing and analysing European energy policy. In this dossier, alumni of the College of Europe Natolin’s John Maynard Keynes Promotion (2016-2017), former members of the College of Europe Energy Group, join Nouvelle Europe’s editorial team to offer fresh reflexions on very topical issues of the European

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Energy policy. The articles presented in this issue present a shortened version of the outcomes of the authors’ respective master theses submitted in May 2017. To start with, Francis Masson offers an overview of the concepts of energy security that cohabit within the European Union member state and shows why and how they are detrimental to the creation of a fully integrated Energy Union. In the second article, Lucia Quaglia presents the state of the European markets for renewable electricity. She explains the rationales underlying the different stages of the evolution of this market, and highlights the limitations of the legislative packages and existing approaches to market integration underlying those legislations. Going deeper into the integration of electricity markets, Ronan Haas introduces us into the “The Pentalateral Energy Forum�, a regional integration scheme meant to facilitate the linkages among the electricity markets of the Benelux countries, France and Germany (as well as Austria and Switzerland who joined the group later). He shows to which extent this genuine project is only partially in line with the political processes of creating a European Energy Union. Last but not least, Alexandrina Robu takes us in the European Neighbourhood with a comparative study of the Moldavian and Ukrainian reforms of energy markets. In her article, she analyses how the European Union exports its own energy model towards the Energy Community partners in order to integrate them into its Energy Market.

Katie Treadwell: The Natolin Palace, winter 2016

The Editorial Team of Nouvelle Europe hopes that you enjoy the reading of the last dossier of the year 2017 and wish you a very happy holiday season! Best wishes for a year 2018 full of popularizing articles on the European Union au sens large!

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European Energy security: a clash of representations Francis Masson

Despite the creation of many legal instruments over the last sixty years, energy policy in the EU remains mainly defined at the national level. Energy policy is linked with the vital security of the state. Therefore, the integration of energy policies in the EU is closely related to the issue of delegating national sovereignty to supranational institutions. The reluctance of governments to commit such a transfer of sovereignty is better understood in the light of the concept of energy security. Specifically, understanding how national decision makers conceptualize energy security brings light on the “diverging national interests” that jeopardize the fulfilment of the European Energy Union. The concept of Energy security Energy policy is at the heart of the project of European integration. Already in 1951, the European Coal and Steel Community (ECSC) aimed at pooling coal and steel resources, because war should be made “materially impossible” as stated in French Foreign Minister Robert Schuman’s declaration of 9 May 1950. Energy resources would later be again a cornerstone of European integration along with trade. Indeed, the European Economic Community created in 1957 had a twin sister: the European Atomic Energy Community (Euratom), an economic union aiming a specialist market for civil nuclear energy in Europe. The concept of energy security has its basis at the level of nation-states. It is a historical construct. It varies highly within the EU, and one can question if there is a single concept of energy security prevailing at the EU level at all. This question matters with regards to both internal and external energy relations of the EU. Energy security in political science is, as any other analytical tool, subject to numerous definitions. Barry Barton proposes a comprehensive definition that encompasses all aspects of security studies. According to him, energy security is reached when a state and the totality or majority of its citizens and enterprises have a guaranteed access to sufficient energy resources, when the resources are at an affordable price and when there is no threat of disruption of supply of energy resources in the near future. Energy security must be then understood not only as the mitigation of military threats on energy facilities, but also as the prevention of threats of economic, political, societal and environmental dimensions.

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Security of energy supply: the State’s existential concern The concept of energy security is interdependent with the security of energy supply. At the European level, the security of energy supply is at the centre of the energy policy since the European Commission published the so-called Green Paper on energy in 2000 and 2006. These documents were respectively meant to stimulate discussions at the European level on “the security of energy supply” and on a “European Strategy for Sustainable, Competitive and Secure Energy”. With the entry into force of the Lisbon Treaty in 2009, energy policy was finally supported by provisions in the primary law of the EU. Still, those provisions are entailed in a single article (Art. 194 TFEU), and the majority of legal provisions regulating energy policies in the EU are to be found in the secondary legislation (eg. Regulations and Directives). Security of energy supply is defined by the European institutions according to four criteria: physical security (physical availability on sight of both the resources and the required infrastructure of transport), price security (affordability and prevention of uncontrolled price fluctuation), geographical security (availability of resources in the neighbourhood and the required infrastructure to channel them on long distance) and finally, political security of supply. To better highlight the complexity of this concept, Robert Skinner distinguishes between Hard Energy Security (which encompasses the economic aspect of supplying energy resources) and the Soft Energy Security, the psychological conceptualisation of energy security by the decision makers. Hence, securing the supplies of energy resources means not only to build the infrastructures needed to transport the said resources and to sign economically viable contract with suppliers. Security of supply implies to trust the political and economic partners involved in the supply chain. Yet, the EU’s concept of energy security is the synthesis of the Member States’ representations of their security of energy supply. Those representations are sometimes conflictual. If they seem to be antagonistic, as it is the case with the project of pipeline Nord Stream 2, it is because they are set on different conceptions of energy security. To illustrate this point, let us have a look at the gas profiles of Poland and Germany and see how they influence their concepts of energy security.

The Polish approach to security of energy supply Since the post-communist transition, the Polish international energy strategy can be understood as the search for secured gas imports. It started in 1992 with Gazprom’s proposal to build a pipeline connecting natural gas fields in Western Siberia and the Yamal peninsula to the European markets (the so-called Yamal–Europe pipeline). Agreeing on the project, Poland became a transit country. This geopolitical position guarantees economical incomes and, expectantly, an increased bargaining power with the gas supplier. However, the geopolitical risks of having a single gas supplier were already pointed at by some official back then.

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Figure 1 The Yamal-Europe Pipeline

Over the 1990s, Poland paid too much for the gas it was importing, and was importing much more than what its internal consumption required, both because of the “take or pay”-clause entailed in the gas contract signed with Gazprom. For this reason, the Polish energy policy evolved toward the diversification of gas suppliers while its diplomacy fought for years to renegotiate the contract with Gazprom in 1993. In 2003, they managed to reduce the quantity of imported gas to the real needs of the Polish market. The “take or pay”-clause disappeared only in 2010, consequently to the adoption of the “Third Gas Directive” at the European level in 2009. Gas matters a lot in the Polish “energy mix” (the share of each primary energy sources such as gas and coal in the overall energy consumption of a given territory). Its share rose from 9% to 14% between 1990 and 2013. One third of the domestic consumption is covered by domestic production. In 2012, Poland remained dependent on Russia for 56% of its gas imports. Because of the growing dependence on Russian gas, polish energy policy developed a strong interest for alternative supply routes, looking notably toward Norway and Denmark. Numerous projects of infrastructures were conceptualized since 1990s over the past decades, such as: the onshore pipeline “Amber” (dropped off) or the offshore pipeline “Baltic Pipe” (in discussion since the 1990s, anew since 2016). The Baltic Pipe should link Poland to Norway via the Denmark. Norway is attractive as a gas supplier for Poland because as a member of the European Free Trade Area (unlike Russia) it is bounded to the rules of the European Single Market. In January 2017, the Polish Foreign Minister Witold Waszczykowski stressed the priorities of the energy policy in his yearly address on the Polish foreign policy, underlying that an access to the Norwegian gas storage facilities is a “strategic issue” for security of energy supply not only of his country, but of the whole EU.

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A German representation of security of energy supply at odds with the Polish one? In the Polish energy landscape, Germany appears as a political partner with competing energetic interests. Such a competition results from the very difference between the Polish and the German representations of their respective security of energy supply. The Poles strive for reducing the risks of a disruption in energy supplies. Hence, they have a “geopolitical” concept of security of energy supply. The German concept is said to be “economical” (also called “technical”), because they want to secure available and affordable energy for their high consuming industry. Since the choice taken in 2011 to phase out nuclear power plants (Energiewende), the gas share in the German energy mix has increased significantly, because gas became the alternative energy source to produce the electricity needed by the industry. Russia is also the main gas supplier of German, but it represented only one third of its imports in 2012.

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The need to ensure cheap gas on the long term for the German industry explains the government’s positive attitude toward the pipeline project Nord Stream 2 which should double the direct flow of gas between Germany and Russia (up to 110 bcm/year). While this pipeline would increase the European security of energy supply in the German view (in economic terms), it would decrease it according to the Polish conception, because it means more dependence toward a single supplier of energy resources (in geopolitical terms). Those diverging representations of the security of energy supply are not to be linked with a Polish or a German “mind-set”. There is no essentialism behind those conceptualizations. They are really the result of the historical evolutions of the country’s respective energy market, along with ideas, norms, and values socially aggregated through specific institutional venues. Hence, the Polish “geopolitical” concept is linked to the fact that the Polish market remains much less developed and interconnected than the German one. The Polish concept is based on risk assessment because they are already highly dependent on Russian gas and they have suffered twice from the disruption of gas supply in 2006 and 2008/9.

How to reconcile diverging perceptions of energy security between member states? The consequence of diverging conception of energy security leads to the definition of antagonist energy policies at the member state level. Nord Stream 2 is a bone of contention of the GermanPolish energy relationship because it crystallises not only those antagonistic concepts, but it is also the expression of diverging economic and political interests. Another example of the consequences of these diverging concepts are the way chosen by both countries to diversify their energy mix, which

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is one of the steps to be undertaken to reach the goals of the Commission’s “European Energy Security Strategy” of May 2014. Germany goes back to coal and gas in order to phase out nuclear energy, whereas its energy mix was already diversified. In contrary, the Polish energy mix still needs to be diversified drastically because coal remains predominant and the Polish government sees the key of its diversification in the development of nuclear energy. According to Aleksandra Gawlikowska-Fyk, Head of the Energy project at the Polish Institute of International Affairs, the long term purpose of Polish energy policy under the current government is a full independence from Russian gas and oil import. When it comes to the share of energies from renewable resources in their energy mixes, both countries remained below the European threshold in 2015 and hadn’t yet reached their 2020 targets.

Figure 2: Share of energy from renewable sources, 2004 and 2015

How to reconcile those antagonist perceptions at the European level? According to Andreas Heinrich, co-author of a major comparative study of Polish and German views on the Energy Union, only dialogue at bilateral and European level can help to overcome this disparity of perception. The need to understand each other is again at the heart of deadlocks of the European integration process. This answer might seem trivial for the reader, but it is of highest importance if we want to develop a common European external energy policy. The Commission must also be aware of and understand each Member States representation of energy security to ensure their supports in drafting the future European energy legislation. As long as we live in a European Union and not in a European Federation, understanding each other's national sensibility in the light of the national historical developments will remain the key to solve the everlasting dilemma of EU integration: How to match diverging national interests of the Member States with the common interests of the Union and its 550 million citizens?

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Crédit illustration Figure 1: Samuel Bailey “Map of the Yamal-Europe natural gas transportation pipeline” 15 November 2009. URL: https://pxhere.com/en/photo/92270 Polish and German Energy mixes: Łada Agnieszka (et. all.) (edit.), The Energy Union: Views from France, Germany, Poland, and the United Kingdom. Institut of Public Affairs, Varsovie, 2015. pp. 55 & 93. Figure 2: Share of energy from renewable sources, 2004 and 2015 (in % of gross final energy consumption) Source: Eurostat URL: http://ec.europa.eu/eurostat/statistics-explained/images/d/d9/Infographic_REN-2004-2015.png

Aller plus loin : A lire BARTON Barry (et.al.) (edit.), Energy Security: Managing Risk in a Dynamic Legal and Regulatory Environment. Oxford University Press, 2004. BELLIGOLI Serena, North Stream à l'épreuve des relations euro-russes, Université catholique de Louvain, IEE-Document n°47, janvier 2012. BÖHME Dimo, EU-Russia Energy Relations: What Chance for Solutions? : a Focus on the Natural gaz sector. Universitätsverlag Potsdam, 2011. BROWN Heather, « Post-Communist Poland and the European Union: Energy Policy and Relations with Russia », in The Polish Review, Vol. 61, No. 3, 2016. p. 85-98, doi: 10.5406/polishreview.61.3.0085. CORRELJÉ Aad, VAN DER LINDE Coby, « Energy supply security and geopolitics: A European perspective », in: Energy Policy n°34, 2006. p. 532–543, doi: 10.1016/j.enpol.2005.11.008. ESCRIBANO Gonzalo, GARCIA-VERDUGO Javier, « Energy security, energy corridors and the geopolitical concept », in: Escribano, Garcia-Verdugo, Marin-Quemada (dir.), Energy security for the EU in the 21st century. Market, geopolitics and corridors. Routledge, New York, 2010. HEINRICH Andreas (et. al.), « Auf dem Weg zu einer gemeinsamen europäischen Energiepolitik ? Energiesicherheitsdebatte in Polen und Deutschland », Polen Analysen, n° 190, 01.11.2016. p. 2-8. HEINRICH Andreas, « Poland as a Transit Country for Russian Natural Gas: Potential for Conflict », Koszalin Institut of comparative European studies, Koszalin, 2007. KAMOLA-CIEŚLIK Małgorzata , « LNG terminal in Świnoujście as an element of Poland’s energy security », in Polish Political Science Yearbook, Vol. 44, 2015. p. 268-282. ŁADA Agnieszka (et. all.) (edit.), The Energy Union: Views from France, Germany, Poland, and the United Kingdom. Institut of Public Affairs, Varsovie, 2015. TALSETH Lars-Christian U, The politics of Power, EU-Russia Energy Relations in the 21st century. Palgrave-Macmillan, Cham, Switzerland. 2017.

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Sur internet HARPER Jo, « Poland and Norway revisit gas terminal and pipeline plans », Central European Financial Observer, 25.03.2016. https://financialobserver.eu/poland/poland-and-norway-revisit-gas-terminal-and-pipeline-plans/ Ministère des Affaires étrangères de la République de Pologne, « Minister Witold Waszczykowski on Polish diplomacy priorities in 2017 ». 9 February 2017. http://www.msz.gov.pl/en/c/MOBILE/news/minister_witold_waszczykowski_on_polish_diplomacy_ priorities_in_2017 RAABE Stephan, « The dispute over the Baltic gas pipeline. A threat or a necessary supply project? », Konrad-Adenauer-Stiftung, Auslandsinformationen 2/2009., Berlin, 6 avril 2009. URL: http://www.kas.de/wf/doc/kas_16137-544-2-30.pdf?090406132317 SKINNER, Robert, « Strategies for a greater Energy security and Resources Security », Oxford Institute for Energy Studies, Juin 2006. 12 pp. URL: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2011/02/Presentation34StrategiesforGreaterEnergySecurityandResourceSecurity-RSkinner-2006.pdf Vytautas Sirijos Gira, « The Polish-Russian Deal on Natural Gas Supply: The Incapacity of the EU Energy Policy », in Eastern European Studies Center: Eastern Pulse, Analytical Newsletter 2010 No. 6 (34). 8 pp. http://www.eesc.lt/uploads/news/id360/Eastern%20Pulse%206%20(34).pdf

Francis Masson is an Academic Assistant at the College of Europe Natolin. He graduated from the College of Europe interdisciplinary Studies program in 2017. He is also a graduate of the Institute d’étude Européenne of the Université Paris 2 – Sorbonne Nouvelle (2016). Prior to the College of Europe, he worked for the Brandenbourg based Fondation Genshagen for Franco-German-Polish cooperation. His areas of interests are the Franco-German relationship, the Weimar Triangle and the energy policy of the European Union and its member states.

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The European Renewable Energy Markets Lucia Quaglia

On 30 November 2016, the European Commission released the latest legislative initiative in the energy field entitled “Clean Energy for all Europeans”. It aims to make the energy transition efficient, smooth and engaging. Its core resides in the Winter Package, which addresses the electricity markets, the renewable energy markets and the energy efficiency issue. How efficient is the EU in integrating national energy markets while trying to provide cleaner energy for tomorrow’s and today’s consumers? The greatest challenge lies in integrating renewables into the electricity system in order to stimulate huge investments without disrupting the entire system. In particular, the Winter Package tries to define a European framework that addresses current malfunctions, so as to avoid that national decisions obstruct the European vision of the electricity market. Despite the fact that energy is a shared competence, the choice of the energy supply relies exclusively on Member States. As a consequence, we have different national energy mix choices that prevent a functional cross-border cooperation, essential for an integrated European energy market. The aim of this article is to assess whether Europe is going to the right direction in making renewable electricity a key sector for the economic recovery and future development of Europe.

The European Union Scenario The European Union is moving toward a clean energy scenario because it strives to reduce greenhouse gas emissions and to comply with the commitments undertaken under the worldwide Paris Agreement on climate change from 2015. The European Union, with its advanced policies in the energy and environmental fields, has always been at the global forefront in the clean energy transition. In particular, with the 20/20/20 climate and energy package and the emission trading scheme legislation, the EU has set legislative cornerstones in fighting climate change.

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The Future Policies A more recent one is the so-called Winter Package, a set of legislations which modifies the previous electricity and renewables legislation. Its main purpose is to spread the potential of clean energy, making it “the growth sector of the future.” Huge amounts of investments are required in order to reach that goal; their cost is estimated by the European Commission to be around “379 billion of euros” each year over the 2020-2030 period. To reach them, the EU has devised instruments such as the European Fund for Strategic Investments and the European Structural and Investment funds. However, private investments are also necessary, but the current scenario prevents a clear prediction of the electricity price, which is not ultimately driven by market forces but by State subsidies. To put it shortly: this is not a suitable framework for long-term investments in the renewable electricity sector.

The EU energy dependency These investments are required not only to shift toward a clean energy economy. Indeed, the EU has never been energy self-sufficient. The EU is deeply dependent in importing fossil fuels, in particular gas from Russia and oil from third countries. As acknowledged by the European Commission, in a document of 2014 entitled EU energy markets in 2014, “the EU is the world’s largest energy importer. The majority of Member States are highly dependent on imports of oil and gas. A few Member States have significant production that makes a considerable contribution to the European energy balance. “ Ultimately, this situation has determined high prices for final consumers and serious problems of supplies when geopolitical issues arose, as it happened during the Russia-Ukraine crisis of 2006 and 2009 or, looking back in the past, during the oil crisis in the 70s.

The Deployment of Renewables The EU’s interest in renewable energies is not new. After the Chernobyl disaster in 1986, nuclear energy was not anymore considered safe enough to be produced; as a consequence, the EU pushed for a strong deployment of renewables. Since then, its production has continued to grow consistently. In 2008, through the release of the 20/20/20 package in energy and climate change, the EU made a big step forward in making binding the achievement of the reduction of greenhouse gases by 20%, the rise in the share of renewables to 20%, and the increase of energy efficiency by 20% before 2020. As far as renewables are concerned, each Member State must comply with its national binding targets. So far, these measures seem to work. According to Eurostat, “in 2015, the share of energy from renewable sources in gross final consumption of energy reached 16.7% in the European Union, nearly double from 2004 (8.5%).” However, due to the fact that the final decision on energy supplies relies on Member States, this growth has not been uniform across the EU. Some States such as Poland still strongly relies on fossil fuels production and its coal power plants while others, such as Germany, have a virtual ability to rely on 100% of renewables. While 11 out of 28 Member States have already achieved their targets, others continue to struggle.

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The Third Renewable Energy Sources Directive To tackle these differences, the Winter Package repeals the second Renewable Energy Sources (RES) Directive, with the so-called third RES Directive, establishing that a binding EU target of at least 27% for renewables should be reached by 2030. The EU target gets rid of national targets in order to support cooperation, cross-border participation, and the reduction of subsidies. Indeed, subsidies are ultimately preventing an appropriate price formation. Subsidies make prices not driven by market forces, but a result of political choices pursued through administrative measures. The third RES Directive pushed for a more market-centered approach, getting rid of administrative tariffs such as feed-in tariffs (offering long-term contracts to renewable energy producers) and pushing for a more market-oriented approach driven by a feed-in premium (fix tariffs plus a premium). To integrate Renewables into the grid however, getting rid of subsidies is not sufficient; there is an essential need to redefine the electricity markets to make them suitable for renewables. This is why the Winter Package also repeals the third electricity package concerning electricity markets, to make them more suitable for renewables.

The Electricity Markets In the past, the electricity markets were State monopolies, which gradually started to open to different competitors in order to increase its efficiency and decrease retail prices for final consumers. To reach that goal, unbundling rules, i.e. the separation of vertical integrated structures, as owned by big electricity producers like the Italian electricity company Enel, were introduced. Unbundling, as a part of the internal market rules, is the effective separation of supply and production activities from network operations. Unbundling is meant to avoid monopolistic ownership of energy infrastructure as well as to create better functioning energy companies. The European electricity market is the sum of the 28 national electricity markets, brought together by cross border cooperation. The final aim of the integration of the European electricity market is to get a unique European price for electricity. Right now, the price varies on a zonal basis. Moreover, the electricity flows from power plants to final consumers are produced through different sources: renewables and nuclear energy are considered clean energy sources, as opposed to coal, oil and gas which cause high emissions of greenhouse gas. Old power plants based on coal need to be replaced or substituted in favour of cleaner production; this is also an issue to be addressed when taking into account the future electricity system. Then, the electricity is transmitted to distributors, which sell electricity to consumers. The crossborder cooperation is ensured by the so-called “Transmission System”, which is usually a State monopoly. There are more than 300 000 km of power lines in Europe, including 355 cross-border lines. The production, transmission and distribution system in the electricity markets make the socalled “target model” which is the current model running in the EU.

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The Target Model This model was designed to support mainly the traditional European production based on fossil fuels and gas. Within the target model, the energy delivered is traded within four markets: day-ahead, intraday, balancing power and forward markets. Currently, only the day-ahead market is functioning properly due the large number of players; the other three still need to increase their liquidity. Why is why energy is traded mainly on a day to day basis (in the day-ahead market) between seller and buyer, aiming at a delivery of energy for the following day. The price is set through an auction, won by the last power plant necessary to satisfy demand according to the marginal price rules. This means that the power plant with the lower marginal cost is the one that wins the auction. In economics, the marginal cost is the cost of producing an additional unit of output. In a market dominated by fossil fuels or traditional renewable power plants such as hydro, this system ensure that the least expensive plants are running at any time (the so-called merit order effect). However, the increased share of renewables in the electricity production has caused some deep and structural changes in the functioning of the target models, because they do not face any marginal costs.

The Renewables Markets Renewable markets are currently growing all around the world to meet the increasing demand of growing economies such as China and India and to achieve clean policies in developed countries such as Europe and USA. In Europe, the production of electricity by renewable sources in 2015 was the same as the existing traditional generation capacity of 430 GW. Their consumption has constantly increased, with an average share of 16.7% of the final energy consumption in 2015; first in the cooling and heating systems, then in electricity and finally in the transport sector. Nevertheless, the share of renewable energies in transport is expected to increase and drive the spread of renewables, with the mass production of batteries for electric vehicles. The main issue is how to integrate renewable into the electricity grid without being disruptive for the system. Electricity generated by renewable sources comes first into the grid because their “priority of dispatch� is guaranteed by the second renewable directive. Moreover, being dependent on weather conditions, renewable energy sources have zero marginal costs. Nevertheless, electricity pricing is constantly increasing. Why? Because renewables are constantly financed by subsidies, whose share in the final bill for consumers have constantly increased over the years. For all these reasons, market price signals are not reliable anymore and therefore, investments in this sector are stuck. The main problem is that the supply and demand of electricity in the grid must always be balanced. To put it shortly: in order to avoid blackouts, there must always be electricity running in the cables. When the sun is not shining, or the wind is not blowing, especially during the peak demand, the risk of imbalance in the grid increases. Putting a cap on electricity prices in order to stimulate power plants to produce electricity does not solve the issue of the future and constant increase of electricity from renewable sources into the grid. Ultimately, it is neither the more efficient nor an appropriate market-oriented way to deal with this

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situation. We face a paradoxical situation: State subsidies are vital on the one side to guarantee the functioning of the electricity market, but they prevent the investments necessary for its development.

The Winter Package This situation is currently blocking the electricity market. To solve it, the European Commission has released the “Winter Package� at the end of 2016, which modifies the target model. First, the reform addresses the demand-response issue and the necessity to better develop short-term electricity markets such as the intra-day and the balancing markets in order to deal with the peak load and base load scenarios. Storing energy is another solution forecasted in the Winter Package. Until now, the pumped storage in the hydroelectricity sector has been the classical way to store energy. However, another possibility is storing energy using batteries. This technology is facing cost reduction thanks to the mass-scale production by companies like Tesla. However, European industries lag behind in the global competition of developing these innovative technologies. The third option is developing a capacity mechanism, a sort of administrative measures that remunerate generators for the availability of resources. Since they have an impact on competition rules on the internal electricity market, they have to comply with State of Aid rules. The Winter Package proposal sets principles for designing capacity mechanisms in line with the European regulation, avoiding distortion to competition and opening for cross-border cooperation. With this regard the most important thing is phasing out subsidies, however, for the moment this seems not feasible. This is why the Winter Package forecasts a gradual market-oriented approach, getting rid of the price cap and establishing a premium driven by market rules. The Renewable Tariffs To reach this goal, the Commission has upgraded the Environmental State of Aid Guidelines for the period until 2020. This document sets the rules that Member States have to comply with when they design financial support schemes. As far as the cross-border cooperation mechanisms are concerned, these Guidelines do not set specific any binding rules; they state that support schemes should be open, without any binding commitment. As a consequence, the final framework depicted by these Guidelines seems vague and fragmented, leaving much discretion to Member States, as far as the choice and the degree of openness of support schemes concern, which ultimately does not favour future investments. Hence, the question of how to better manage the tariffs of renewable energy sources in order to foster the integration of the European energy market remains opened.

Conclusions A massive increase in energy supplies from renewable sources is to be expected for the next decades. Due to the fact that electricity markets are those with the biggest percentage of renewable production, the European Commission released the Winter Package in order to tackle some malfunctions which are currently blocking the electricity market.

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These malfunctions have been caused by national support schemes for the deployment of renewables sources. However, they have now become unsustainable, because they distort the right market price formation, ultimately preventing investments in the electricity sector. This is why the Winter Package forecasts a shift from national regulation toward a market-oriented approach. It establishes a new framework for support schemes for the period after 2020 and, at the same time, reforms the electricity market to make it suitable for future challenges. One of the measures will be the integration of huge share of renewables, which will always be volatile and deeply dependent on weather conditions. As a consequence, flexibility is required and only a less rigid and discretional market approach can help to achieve these goals. Only if a consistent number of Member States agrees on these changes will the EU be able to regain investors’ trust. Their trust is necessary for the achievement of the 2030 and 2050 de-carbonisation targets. To achieve them, a properly functioning electricity market is necessary and, in that sense, the Winter Package is going in the right direction by forecasting the proper adjustment of the electricity market in order to make the integration of renewable energy sources suitable and not disruptive. The final aim remains to make the best use of both the technology and monetary potentiality to boost the EU economic growth in the future and to enable a smooth and efficient shift from a carbonintensive to a low-carbon economy. This is the only way to create a strong and unique European Energy Union.

References BUCHAN David & KEAY Malcom, Europe’s long Energy Journey: Towards an Energy Union? (1st edition), Oxford University Press, Oxford, 2015, p. 55. GENOVESE Fabio & EGENHOFER Christian, “Reforming the electricity Market Design of EU Electricity Markets: Addressing the Challenges of a Low-Carbon Power Sector,” CEPS Task Force Report, 27 July 2015, p. 21. KEAY Malcolm, The EU Target Model for electricity markets: fit for purpose?, in Oxford Energy Comment, University of Oxford, May 2013, p. 3. “Capacity Mechanism for electricity”, European Parliament, Briefing May 2017. “Energy from Renewable Sources”, Eurostat, May 2017. “Renewable energy in Europe 2017 Recent growth and knock-on effects”, EEA, Report No 3/2017. “Renewable energy in the EU”, Eurostat Newsrelease, March 2017. “Second Report on the State of the Energy Union”, European Commission, Communication, COM(2017) 53 final, February 2017. “Understanding electricity markets in the EU”, European Parliament, Briefing November 2016. “Clean Energy for All Europeans – unlocking Europe’s growth potential”, European Commission, Press Release: Brussels, 30 November 2016. “EU energy markets in 2014”, European Commission, 2014. LUCIA QUAGLIA is a graduate from the College of Europe Natolin in European interdisciplinary studies. She is specializing in the analysis of the renewable energy sector with a focus on the legislative initiatives undertaken by the EU to tackle the current bottlenecks and foster investment such as the Winter Package and the ETS reform.

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The Pentalateral Energy Forum: Inter-connector of European powers Ronan Haas

One of the actual creators of the common electricity market, the Pentalateral Energy Forum is considered one of the most-advanced operational structures for Energy in Europe aiming at a further integration of electricity markets and the development of common approaches in guaranteeing the security of supply. Its activities have grown to become highly elaborated in the recent years, and as a consequence, ever greater expectations are being placed on it.

Since the European Commission launched the Regional Initiatives facilitating electricity trade and setting fair rules for cross-border exchanges almost fifteen years ago, the stakeholders of the electricity sector have increasingly engaged in important dialogues to build a common market. The shift from a mosaic of national visions to a wider set of regional and EU frameworks is already a reality. The need for closer links between the Benelux, French and German electricity markets was concretely expressed by a voluntary association of the national Transmission System Operators in 2005 (called the ‘Pentalateral Energy Forum’), who were joined by Austria and Switzerland two years later. However, despite Commission-given incentives for the interconnection of national grids, it remains the State representatives who dominate decision-making in the Forum. Indeed, individual European member states retain control over decisions concerning their energy mix and the general structure of their energy supply. Therefore, one may wonder whether the Forum is an intermediate step to the Energy Union or a long-term structural organization. Let's dive a little deeper into this intriguing regional grouping.

An association of volunteers In an ever more interconnected European electricity market, the independent management of risks by each country is no longer possible. One of the most recent achievements of the Pentalateral Energy Forum is the signing, last June, of an agreement for the management of the power sector in case of a crisis. This new regulation for the open electricity market between these seven countries is a concrete expression of the work stemming from their cooperation. There is a long tradition of cooperation

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between the founding countries of the Pentalateral Forum; a driving force facilitating dialogue and agreement on Energy issues. The early years of this Forum had been marked by a purely intergovernmental expression of the necessity to cooperate. The cooperation was organized under the support of the Benelux General Secretariat. A Memorandum of Understanding signed in June 2007 formalized the cooperation between the signatories, namely, the Transmission System Operators (TSOs), the National Regulatory Authorities (NRAs), the market parties, the Power Exchanges (PXs), the national ministries and the European Commission. The dialogue was materialized by the creation of so-called “Support Groups� which serve as platforms for sharing experiences to fulfill a more integrated market. The Groups are driven by experts and market players; which is why it is more a place for a confrontation of economic interests rather than national interests. Energy ministers play also a key role in directing the Forum, through regular review and support throughout the whole process. The true formal architecture of the Forum's work came with the Second Political Declaration in 2015 which established a Ministerial Conference as the governing body of the Forum, tasked to define its global objective. It also set up a Committee composed of Coordinators (representing the ministers) in order to monitor the overall process. They have the duty of ensuring the practical preparation of the meetings and the follow-up of decisions. This Committee meets at least twice a year to discuss and make sure that the consensus over the working program and methods remains guaranteed. Indeed, decisions are taken by consensus of the Ministerial Conference. This decision making process can be intricate and highly nuanced due to the diversity of the signatories and the interplay of these actors with national stakeholders. Two elements facilitate the overall conclusion of agreements. First, the search for unanimity across the parties starts in the preparatory research and in the discussions among Ministries and Director Generals where divergent interests are overcome through political compromise. Second, the signatories make use of the possibility to have informal meetings in a Penta-format, but without any formal institutional framework. Then, there are several ad hoc groups of experts trying to solve the main problematic issues. This system between the seven Member States allows for an intense dialogue and for an attainment of the most suitable solutions and directions for the electricity market.

A driving force for concrete accomplishments Today, the Forum is the leading format for the cooperation in Europe on energy issues, working through coupling, security of supply and enhanced flexibility of the market. The 2007 Memorandum expressed the principles which must form the basis of this process: fairness, transparency, efficiency, security and non-discrimination. Taking into account these principles, the Pentalateral Energy Forum has since developed a method to coordinate the levels of electricity generated between the states, in order to achieve market coupling (allow energy distributors to easily by electricity in a neighboring market on a day-to-day timeframe). To reach this objective, the stakeholders adopted harmonised rules for electricity trade and have created an independent, non-discriminatory and transparent governance structure composed of Transmission system operator and Power Exchanges taking the form of working groups. Results are also notable in the field of security of supply. The main step towards this was the publication of the Pentalateral Generation Adequacy Assessment in March 2015. This document constituted the first analysis of electricity security of supply in Europe conducted from a Regional perspective. Thanks to the cooperation among regional actors, the Forum established a common methodology in the assessment of electricity generation for the future. By doing so, the Pentalateral Forum illustrates its leading role in the regional cooperation through this document. As well as

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developing a common working methodology, the document analyzed the state of existing infrastructures, strategic reserves and their necessary improvement. Presently, two further generation adequacy assessments are planned, one for the period 2018-2019 and one for 2023-2024. Moreover, it is important to highlight that in 2015, the adoption of the Joint Declaration for Regional Cooperation on Security of Electricity Supply was signed by 12 electricity neighbors. This is a step forward to improve the broader cooperation between neighboring countries by giving a political stimulus for creating concrete bridges among the different grids.

Renewables, the forgotten issue? The integration of electricity from Green power plants in the market is one of the main challenge for the sector. A common action for the promotion of Renewables has been completely absent in the first common action plans. It is still possible to view the 2015 Declaration as the first step towards a stronger coordination and the development of joint instruments here. Indeed, the signatories expressed their wish to develop “a common vision for the market integration of renewable energy” in order to “ensure the transition to a sustainable electricity system based on an increasing share of renewable electricity generation”. No concrete actions or tools are foreseen in the document, but stakeholders will have to implement the so-called “no regret measure”. The latter is a new way to act in which decisions will be taken in order to reduce the threat of climate change through energy-saving measures. The only requirement is the call for an analysis on the development of new low-carbon economy and the integration of Renewable energy sources in the market. This is simply a formal announcement of something already developed at national level, because the ministerial conference indicated the need to be in accordance with the new guidelines on State Aid for environmental protection and energy, issued by the EU Commission. But even if the Forum is not yet the place for forming a joint policy for Renewables, the stakeholders want to enhance the flexibility of their electricity market. Indeed, flexibility is the key element to elaborate the essential conditions for an increased share of renewables in the system. Among the concrete actions taken, it is particularly worth highlighting the elaboration of a Roadmap toward the alignment of opening and closing times of electricity markets. There is also an intense cooperation among NRAs, TSOs, DSOs, market parties, PXs, renewable energy producers, the Smart Energy Demand coalition (a European Business association) and the neighboring actors who exchange together through intense discussions on balancing, intra-day exchanges and the role of the demandside response. Finally, within the Support Group discussions, there is also a process of identification of best practices concerning energy storage, and regulatory or other obstacles to the enhancement of flexibility. In spite of the advances brought to the fore by the Pentalateral Energy Forum towards a fullyintegrated electricity market, it remains separated from the formal political processes for building the Energy Union. Whether it will eventually be integrated into the wider EU-framework is an unanswerable question, but it is representative of a growing trend towards regionalization for decision-making. What is clear is that this organization and its engaged stakeholders have found a unique but effective means of working together to achieve a level of interconnectedness never-before imaginable in a European mosaic of national energy visions.

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References

DE JONG Jacques & EGENHOFER Christian, Exploring a Regional Approach to EU Energy Policies, Brussels, CEPS Special Report, No. 84, 2014. FRAUNHOFER Iwes, The European Power System in 2030: Flexibility Challenges and Integration Benefits. An Analysis with a Focus on the Pentalateral Energy Forum Region, Kassel, Analysis on the behalf of Agora Energiwende, 2015. GLACHANT Jean-Michel & LEVEQUE Francois, Electricity Reform in Europe: Towards a Single Energy Market. Cheltenham, Edward Elgar Publishing Limited, 2009. MEEUS Leonardo et al., Market coupling and the importance of price coordination between power exchanges, Energy, Vol 34, 2009, pp. 228-234, doi:10.1016/j.energy.2008.04.013. UMPFENBACH Katharina, GRAF Andreas & BAUSCH Camilla, Regional cooperation in the context of the new 2030 energy governance, Berlin, Report commissioned by the European Climate Foundation, Ecologic Institute, 2015. Site internet du Forum http://www.benelux.int/nl/kernthemas/holder/energie/pentalateral-energy-forum/

pentalateral

Ronan Haas holds a Master degree in European Interdisciplinary Studies from the College of Europe Natolin as well as a master degree in International and European law from the university Grenobles Alpes He is now working in Bruxelles as Public Affairs officer Intern in the energy field.

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Moldova and Ukraine from East to West: Increased implementation of European norms for a more secure eastern energy market Alexandrina Robu

The European Union aims to export its own energy model towards the Energy Community partners in order to integrate them into its Energy Market, and therefore to reduce their dependence on Russian gas. On the other hand, the neighboring countries have to fully liberalize their energy markets by implementing the EU Energy acquis. This article will analyze the Moldovan and Ukrainian drive for a pan-European energy market. Energy security in the EU’s political field Since the gas crises of 2006, when Russia disrupted the gas supplies transiting Ukraine, and 2009, when disagreement between Russia and Ukraine affected eighteen European countries, the European Union understood that it should address energy security at the Union level as much as it is addressed at the Members States level. Thus, the EU aims to diversify the national energy-mix following two intertwined goals: avoid the risk of a supplier failure and reduce its dependence on one big supplier. The European Union aims at creating an entirely effective, efficient and liberalized energy market, as well as to fully integrate its Member State in an EU gas and electricity national markets. The latest piece of legislation in that sense is the so called “Third Energy Package� entered in force on September 2009. Through it, the EU wanted to contribute to the enhancement of the security of supply, reinforce consumer protection, establish truly independent Regulatory Authorities, and encourage better

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standards of services as well as cooperation among Transmission System Operators and collaboration between Member States in cases of gas disruptions. Last but not least, one of the purposes is to maintain the energy prices at the lowest point possible. The unbundling of the EU energy networks is at the heart of the directives. Legal and functional unbundling means that the same legal entity cannot exercise control on production and/or generation or supply undertaking and owning or have other legal rights over transmission system or transmission system operator. It was considered as the legal solution for the achievement of competitive gas and electricity markets. As in all its external relations regarding the Neighbourhood, in the energy policy field, the EU endeavours to promote its norms. Through various political channels, the EU attempts to export its energy model, aiming to create convergence between local and EU markets and to consequently increase the level of security of supply. The EU energy policy extension to Eastern Europe has led to the creation, in 2006, of a regional international organization - the Energy Community. This community encompasses the European Union, the western Balkan, Moldova, Ukraine and Georgia. Norway, Turkey and Armenia are observers. Once established, the common European energy market will be open for accession to the Contracting Parties of the Energy Community, provided that they restructure and unbundle their energy operators, which often dates back to the former Soviet-era. This will happen through the transposition of EU legislation, enhancing energy efficiency, the creation of new interconnections infrastructures (gas and electricity) and the continuous liberalization of energy markets. Therefore, the Energy Community demonstrates the capacity of the EU to recreate its own institutions and procedures outside its borders.

Figure 1. Energy Community Membership. Source: Energy Community Secretariat

The case of the Republic of Moldova

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The Republic of Moldova became a contracting party of the Energy Community Treaty in 2010 and has therefore engaged to transpose EU energy legislation, develop competitive and open electricity and gas markets and to integrate its national energy markets into the European one. In order to promote development of the energy sector, the legal framework was constantly developed having a clear objective to align it to the European framework and to the relevant acquis of the Energy Community. By approving the Laws on Natural Gas and Electricity in May 2016, Moldova transposed most of the provisions of the Third Energy Package. With regard to renewables and energy efficiency developments in Moldova, it should be highlighted that they are aligned to the Third Energy Package. For the Distribution System Operators, the Energy Community report shows that it was only legally unbundled, but not yet functionally. Moldovagaz is the main gas company in the Republic of Moldova, performing activities of transmission, distribution and supply. It also provides the transit of 17 to 19 bcm of Russian gas to the Balkans. The company’s shares are divided between the Moldovan state (36.6%), separatist authorities in Transnistria (13.4%) and Gazprom (50%). Regarding the ownership unbundling of Moldovagaz required by the Third Energy Package, the Republic of Moldova has a derogation until 01.01.2020. However it can be implemented only when Gazprom and Russia will accept to ‘give freedom’ to the gas sector of Moldova.

Figure 2. Moldova’s Gas Market Scheme Source: Energy Community Secretariat

Owning the majority of Moldovagaz shares is the ‘ace up the sleeve’ of Russia, which is used as a weapon against Moldova when they are negotiating the territorial issue of Transnistria (since 1990 a self-proclaimed state on the internationally recognized territory of Moldova), the gas price or when Moldova firmly decides about its European path. The new laws adopted in 2016 by the Moldavian authorities creates a legal and regulatory environment for the development of competitive electricity and gas markets. However, competition remains merely theoretical. Indeed, there is a lack of competitors on the wholesale segments, with only a few big market players in both gas and electricity markets. The Russian influence through Gazprom and through important Moldovan politicians along with the capture of the energy sector by

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local oligarchs are delaying the liberalization of the gas market and the ‘de facto’ implementation of the European energy acquis.

The Ukrainian case Ukraine, as well as Moldova, engaged to transpose and implement the EU energy acquis into the national legislation, to liberalize the energy market and to interconnect national grids to the European network. To fulfil these commitments, Ukraine adopted the Second Energy Package. Moreover, the Law on the Natural Gas Market from 1st October 2015 marks the implementation of the provisions relative to gas of the Third Energy Package. In comparison with the Republic of Moldova, Ukraine had already adopted beforehand most of the secondary legislation which allow the new gas law to be functional. Nevertheless, the reform will only be completed after Ukraine will amend several previous laws. For Ukraine, the gas market reform represents ‘the mother of all reforms’ and its implementation is crucial for the further integration and enhancement of energy security. In this regard, the launch in July 20126 of an action plan on unbundling Naftogaz of Ukraine represents an important step forward. However, Ukraine is delaying the implementation of some of its very important provisions. Still, the unbundling reform of the system operators was done; thus 42 licensed distribution system operators are legally unbundled. According to the Gas Law, the market is fully opened with deregulated prices. However, upon analyzing the implementation of the Law, according to Dixi Group, only 30% of the market has been liberalized and is functioning on well running price competition. The alignment of the Ukrainian legislation to the European one would lead to a diminution of the corruption in the energy sector and will exclude the ‘middlemen’ from the energy market scheme. The term “middlemen” refers to the local oligarchs that were purchasing the gas from Russia at a lower price than the market one and selling to the Ukrainian state at a competitive price, thus creating an artificial win-win situation.

Figure 3. Gas consumption in Ukraine and the share of imported gas in total consumption 1991-2015. Source: Naftogaz

In the electricity sector, things are quite similar. The new Electricity Law was adopted in April 2017 after intense pressures from the EU. According to the Dixi Group report, Ukraine transposed only 29 % of the Third Energy Package. In 2013, the Energy Community initiated a case in the matter of admission to the transmission capacity of inter-state electricity grids that will soon be lifted, as the electricity law was adopted. Moreover, the government created a Managing Committee for preparation of the Energy Strategy of Ukraine until 2035. Upon analyzing the National Energy and Utilities Regulatory Commission of Ukraine, as in the case of Moldova, one may observe that its organization fails to abide most criteria regarding the

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independence and transparency of National regulatory Authorities from Directives 2009/72/EU and 2009/73/EU. However, the Ukrainian Regulatory Body has its unique characteristics in the Energy Community since it is not based only on legislation. It was established and has the possibility to be liquidated by presidential decree. The national authorities supported by the Energy Community Secretariat initiated a revision of the Law on the Regulator in 2015, however the draft law was not adopted by the Ukrainian Parliament and no progress has been made since 2015. The Secretariat of the Energy Community in Vienna warned the Ukrainian government that if the law is not adopted soon, an infringement procedure will be initiated. From transposition to implementation: the dilemma of exporting norms in the neighborhood To conclude, we would like to highlight that the transposition of the Third Energy Package into the national legislation of Moldova and Ukraine is made through two main tools which have complementary norms: The Energy Community and Associations Agreements. Association Agreements are treaties between the European Union, its Member States and a non-EU country that creates a framework for co-operation. Provision on energy policies are usually central in Association Agreements, because it is one of the three prominent ‘soft security’ issues along with justice and home affairs and environmental issues. Even though Moldova adopted the Third Energy Package (except for the provisions concerning the independence of the National Regulator), the new laws are, to a great extent, not implemented. Provisions that are the cornerstone of the European energy acquis, such as unbundling both electricity and gas sectors, market rules and tariffs and, to some extent third-party access to the market, are still in the early stages of implementation. Currently, the Energy Community did not open any infringement procedures against Moldova. The Ukrainian energy sector is in the process of implementation of the Third Energy Package. The gas reform, which is considered the biggest achievement of Ukraine, is transposed in the state’s domestic legislation; however, it is only partially implemented. Overall, Ukraine showed positive signs and political will to develop the energy sector and to destroy the existing monopolies which is why energy issues are placed on a high-level position on the political agenda of Ukraine. The EU is supporting both ENP countries to develop an open energy market where there will be more transparency, efficiency, non-discrimination and competition. Such changes would lead to the regional energy market integration, more interconnections and enhancement of the security of supply on a long-term prospect. However, successful transposition will always be conditioned to real implementation, which remain the sole responsibility of the Moldavian and Ukrainian leaders toward there citizens.

References DELVAUX Bram, HUNT Michael, TALUS Kim, EU Energy Law and Policy Issues, 3rd edition, UK, ELRF Collection, Cambridge, 2012. EGENHOFER Christian, ‘Integrating Security of Supply, Market Liberalization and Climate Change. The European Commission’s Green Paper on Secure, Competitive and Sustainable Energy for Europe from a Security-of-Supply Perspective’ in: Ch. EGENHOFER, L. GRIGORIEV, V. SOCOR, A. RILEY, European Energy Security. What should it mean? What to do?, ESF Working Paper Nr.23, October 2006. KEPPLER Jan Horst, ‘Climate Change. Security of Supply and Competitiveness: Does Europe Have the Means to Implement its Ambitious Energy Vision?’ in: J.M. Chevalier, The New Energy Crisis. Climate, Economics and Geopolitics, Palgrave Macmillan, Hampshire, 2009.

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KLOC Kamila and KOSKA Dagmara, ‘Competition Law Mechanisms as Additional Tool of the Third Package Implementation’ in Robert ZAJDLER, EU Energy Law Constrains with the Implementation of the Third Liberalisation Pachage, London, Cambridge Scholars, 2012. LAVENEX Sandra, “EU external governance in ‘wider Europe”, in: Journal of European Public Policy, 11:4, August 2004, pp. 680–700, doi:10.1080/1350176042000248098. RENNER Stephan, ‘EIP, The Energy Community of South-East Europe: A neo-functionalist project of regional integration’, European Integration online Papers, Vol 13, 2009. UMBACH Frank, ‘Ukraine’s energy security and energy foreign policies on the way to Europe’, European Security & Defense, No. 06 2016, Available at: https://transatlanticrelations.org/wpcontent/uploads/2012/01/Chapter-5.pdf. VINOIS Jean-Arnold, EU Energy Law, Volume VI, The Security of Energy Supply in the European Union, Deventer-Leuven, Belgium, Claeys and Casteels Law Publishers, 2012.

Sur Internet Dixi Group, Energy reforms. Monitoring report on Ukraine’s progress in the implementation of the association agreement with the European Union in areas of energy and environment, 2016, Available at: http://dixigroup.org/storage/files/2017-02-20/monthly_december_2016_eng_rs.pdf . Energy Community Secretariat, Annual Implementation Report 2016, Energy Community Secretariat, Vienna, Austria, 1.09.2016. Samopomich, Віце-президент Єврокомісії закликає Кабмін прискорити роботу над законом про ринок електроенергії (Vice President of the European Commission calls on the Cabinet to speed up work on the law on the electricity market), Ukraine, 17.05.2017. Available at: http://samopomich.ua/vitse-prezydent-yevrokomisiyi-zaklykaye-kabmin-pryskoryty-robotu-nadzakonom-pro-rynok-elektroenergiyi/. The Parliament of Moldova, Legea nr. 107 cu privire la energia electrică, The Parliament of Moldova, Chisinau Moldova, 27.05.2016, Available at: http://www.gasnaturalfenosa.md/sites/default/files/Legea_cu_privire_la_energia_electrica_nr_107_d in_27.05.2016.pdf. Ukrainian Parliament, Law of Ukraine on the natural gas market, Ukrainian Parliament, Kiev, Ukraine, 2015.

Alexandrina Robu is policy and events officer at the European Alliance of companies for Energy Efficiency in Buildings (EuroACE) and board member of the Young Entrepreneurs Organisation of the European Union. Alexandrina is a graduate both from the College of Europe were she studied European affairs and State University of Moldova where she studied international law.

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