In the debates about the new climate and energy framework for 2030 and the proposed Energy Union, the European Commission and the Council call for increased regional cooperation between Member States. In addition to strengthening the internal market, this cooperation is meant to facilitate the implementation of the EU 2030 energy efficiency and renewable targets. Both are defined for the Union as a whole, not for single Memeber States. In this policy paper, Katharina Umpfenbach, Andreas Graf and Camilla Bausch take a closer look at the existing landscape of regional institutions in the European electricity sector to explore their potential contribution to an effective furture governance framework. The policy paper is available for download.
As more electrons travel though interconnectors and price effects ripple through regionally coupled markets, national decisions on the fuel mix are leading to ever greater cross-border impacts. At the same time, Member States governments are requesting greater national flexibility in implementing the 2030 energy targets. Presumably as a means to address this tension, the European Commission and the Council call for a new governance system to "foster regional cooperation between Member States". But what would this regional cooperation look like in practice? What could be its specific contribution to achieving the 2030 targets?
With the aim of contributing to this debate, this exploratory study takes a closer look at the existing institutional landscape for regional cooperation in Europe, focusing on the electricity sector. The paper presents four case studies covering the following institutions:
- the Pentalateral Energy Forum (PLEF),
- the North Seas Countries' Offshore Grid Initiative (NSCOGI),
- the European Network of Transmission System Operators for Electricity (ENTSO-E’s) regional groups and
- the Electricity Regional Initiatives (RIs).
The study argues that the existing regional initiatives provide a valuable starting point for addressing the EU’s energy policy objectives, but need to be adapted to fully serve the objectives of establishing an effective 2030 governance system and – in the long-run – decarbonising the European power system. If the political will is there, mandates could be extended to include cooperation on renewable energy and even low-carbon strategies more broadly. However, regional cooperation is unlikely to realign diverging national energy objectives that hindered a consistent EU-28 approach in the first place. The success of cooperation will depend on the political and economic incentives facing Member State governments. A requirement for all member states to formulate national or regional RES targets would provide a strong incentive. In addition, the EU could foresee financial support where regions cooperate and deliver guidance on how to systematically address RES integration and expansion in a regional context.