EU energy regulation ‘at a turning point’

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European energy market integration is happening, albeit slowly, Lord John Mogg, president of the European Regulators Group for Electricity and Gas (ERGEG), argued in an interview with EURACTIV Czech Republic.

Mogg said the winds are turning for European energy regulators, with the EU in the process of negotiating the powers and roles of the EU’s upcoming Agency for the Cooperation of Energy Regulators (ACER) (EURACTIV 19/02/09).

As opposed to existing organisations, which represent individual national authorities, ACER will be a “physically independent European body” with a board of regulators responsible for decision-making, he said.

Mogg argued that as grid interconnections are currently missing, transit countries, in particular, do not see the “benefits of joining up”. The gas crisis, however, has demonstrated that uncertainty will push member states to ensure that better arrangements are put in place by underlining the importance of greater interconnections and solidarity, he said.

“The agency will evolve as a result of that, rather than some artificial idea that an agency can impose rules which will force the integration of the market,” Mogg concluded, adding that the agency’s powers would also be reflected by the fact that market integration was happening.

Meanwhile, 24 European electricity transmission system operators (TSOs) established ENTSO-E, a new Europe-wide network organisation. Mogg argued that the Commission would have to find a balance in the roles of ACER and the future ENTSOs, or networks of national transmission operators.

He believes the Commission must “use all the expertise, local knowledge and long-term established experience that many of the TSOs have,” while looking out for the interests of the European public.

Mogg emphasised that common operating standards will be crucial in an increasingly integrated market, referring to major blackouts two years ago, which he believes resulted partly from differing standards.

“The lifeblood of the system is the codes that are going to be developed over the next decade,” he stated, cautioning, however, that major hurdles would have to be cleared out of the way before the EU is able to agree common standards.

In Mogg’s opinion, the Czech EU Presidency’s proposal to introduce a single tariff for electricity transmission across the EU is “appropriately ambitious for a presidency”. But the most difficult debates during his chairmanship of the energy regulators group had been focused on that issue, he warned.

“When it comes to money and serious changes, you have major problems,” he said.

To read the interview in full, please click here.

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