EU Energy Policy Blog

As far as oil prices are concerned, many scenarios are possible. A jump to $300 per barrel or more in the near future may be the result of a geopolitical crisis in Iran, Venezuela, Saudi Arabia or elsewhere. Low price scenarios seem unlikely today but cannot be completely excluded. Another one which we consider of interest is a “dual-crisis” or “double-shock”. It would present a number of similarities with the development observed between 1973 and the end of the eighties.
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Which mix of policy tools is required to achieve the 2020 objective? My answer is we need both market based instruments and regulations. I recently discussed this issue in a Conference on Integrated Climate and Energy Policy at Bocconi University. Here is the videopodcast. Continue reading »

The song that is being sung by the stakeholders in the debate about the third package needs to be tuned. The lyrics of the song should not be about the legal structure and governance of the physical networks of the industry, but about which steps should be taken to truly achieve integrated EU markets, first of all in electricity.

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What are the new risks within and outside the EU in the value chain of Russian gas? Here is the videopodcast of the speech I delivered at the last CESSA conference (Cambridge, 14-15 December 2007). Continue reading »

Gas models mainly focus on the oligopolistic character of the European gas market. This emphasis responds to two concerns. Firstly, it is commonly (but not universally) admitted that the upstream gas market is concentrated. This reduces competitiveness and security of supply, which may in turn limit the recourse to gas in the European quest for sustainability. Secondly, the Commission and industrial consumers are also worried about concentration in the downstream market. The industry complains that it leads to high prices and hence reduces its competitiveness. Can gas models tell us something relevant about these questions?
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The development of organised markets for electricity and gas requires a high degree of transparency and in turn it helps in providing it. Yet the virtuous circle does not happen spontaneously. Then a satisfactory degree of transparency should be a policy goal of the authorities in charge of the markets. Continue reading »

The Kremlin has only a limited ability to use Russian oil and gas as a “weapon.”

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Coal, the mainstay of US power generation, has been facing unprecedented resistance, including from some unexpected sources.

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Market integration results in increasing electricity bill for consumers in countries enjoying large power generation capacities at low cost. Generally, the rationale for opening-up the market makes sense if enough freedom of choice exists so that considerable effects of production reallocation can be expected. When there are too many restrictions in the system, market opening leads to redistribution without any reallocation. Continue reading »

Long-term energy contracts are under attack by antitrust authorities and courts on both sides of the Atlantic. Should we protect contract certainty to promote infrastructure investments? Or should we deny the validity of contracts concluded in non-competitive energy markets?
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