Energy investments under the EU Ownership Unbundling Regime
KeywordsUnbundling ; Ownership unbundling ; European Union ; Legal framework ; Energy ; Electricity and gas regime
Since the mid-1990s the European Commission has been laying the pavement for European electricity and gas markets, to be opened up, liberalized, and unified. This goal was promoted by three EU energy packages of Directives in late 1990s, 2003 and 2009. The principal objective of the said legislation packages was to formulate a well-organized, competitive, and sustainable energy market across the EU. One of the fundamental provisions of the third package Directives is the unbundling of structures and functions, with ownership unbundling as its extreme expression. In order to meet these objectives significant investments in electricity and gas transmission infrastructure are indispensable. Nevertheless, at the same time, it has as a consequence the creation of impediments for investors looking for the creation of a portfolio of assets at different stages of the energy cycle. To this effect, the Commission has developed a balancing approach to ensure that an application of the unbundling rules will not have a disproportionate effect to energy investors. This working paper sets out the path along which EU electricity and gas unbundling regulation has moved, the way EU energy ownership unbundling rules has been interpreted by the European Commission so as to ensure access of financial investors, and the significance of investments in the energy networks, in addition to the role of energy regulation in the facilitation of the required EU infrastructure financing.