01 Dec 2004

Rethinking the EU Regulatory Strategy for the Internal Energy Market

Kyriakos Gialoglou / Christian Egenhofer

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A key message of this report is that full and effective implementation of proposed legislation will be necessary to ensure a true internal market for energy in the EU, but this alone will not be sufficient. In parallel, more attention must be paid to other, less-prominent fields. The report singles out i) the introduction of incentive-based network regulation and ii) the careful design of principal elements of the wholesale market, i.e. trade of electricity and gas for resale (‘wholesale market design and rules’). Moreover, the internal market needs to be buttressed with the consistent application of competition rules across member states to avoid the creation of national champions. The report also argues that a functioning electricity and gas market depends on market-compatible solutions to security of supply and environmental issues and a rethinking of ‘executive agencies’, whose use to date is inhibited by the Meroni doctrine.