Network Codes and Cross-Border Interconnectors: Analysing the Legal Framework for Achieving the Aims of European Electricity Market Integration

Abstract

Power Across Borders: Unravelling the EU's Legal Framework for Electricity Market Integration My doctoral thesis delves into the EU’s ambitious project of realising a cohesive internal electricity market. This ‘European Energy Union’ promises to be the backbone of energy security, economic vitality, and environmental sustainability across its Member States. The integration of the European electricity systems is thus pivotal for Europe's future under the ongoing energy transition. In this context, I confront the puzzle that, despite great efforts and clear advantages of further interconnection, the couplings between national electrical grids remain insufficient in many places. Delegated Legislation in Focus My research focuses on the complex and highly technical EU legislation governing electricity interconnectors. The EU has worked hard to harmonize the rules on electricity interconnectors throughout Europe following an approach I frame as ‘the Network Code Strategy.’ Under this strategy, the EU has tasked private electricity companies and specialised regulators with developing a dense web of delegated legislation: so-called network codes, guidelines, and methodologies. These delegated rules hold the key to effectively linking national grids but remain under-researched. My aim was to close this research gap, illuminating how the network codes could shape the rollout of an integrated market, where ‘green’ electricity effortlessly flows across national borders. Evaluating the Complexity The gravity of my findings lies in their implications for Europe's trajectory towards green energy and the envisioned Energy Union. The detailed regulatory framework, while robust on paper, fails to deliver on improved interconnectivity. Two factors may explain this important insight. First, the regulation of electricity interconnectors faces high demands: it must ensure the optimal use of existing interconnections and encourage investment in new ones to address the present shortage of capacity. Second, the technical complexity of electric power systems, coupled with a blend of powerful competing interests, further complicates the regulatory landscape. My research aims to cut through this complexity. My findings show that interconnector operators are allowed, even incentivised, to understate capacity on existing interconnectors. At the same time, decisions on electricity infrastructure investment depend heavily on Member States discretion, with limited EU harmonisation. Finally, the Network Code Strategy, while innovative, struggles to reconcile conflicting interests and technical complexities. What is more, the vast and dense web of delegated rules adds more layers of complexity to an already intricate regulatory landscape. These findings help explain why the Network Code Strategy has not yet proven successful at ensuring sufficient electricity interconnections. This is a critical issue, given that the EU holds on to the Network Code Strategy in the energy sector and may adapt the Strategy for use in other technical sectors. Implications for Legal Scholarship, Practice and Policymaking In essence, my thesis shines a light on the complexities beneath Europe's lofty energy aspirations. The findings deepen our understanding of the EU legislation applicable to electricity interconnectors and the regulatory dynamics at play, pinpointing substantial legal and real-world challenges that exacerbate the problem of insufficient interconnection. The insights gained in my work serve as a call for a critical reassessment of Europe's energy integration plan under the Network Code Strategy. It encourages dialogue among legal scholars, practitioners, and policymakers engaged with Europe's energy transition. The dissertation also has a broader relevance. At present, the Network Code Strategy is limited to the power sector, but it could serve as a blueprint for regulating other technical areas. By casting a critical eye on the current approach to EU electricity regulation, the thesis offers a valuable perspective for anyone invested in European integration efforts in technical sectors.