The Market Design Initiative: Towards Better Governance of EU Energy Markets
Achieving important Energy Union policy objectives (including energy security, internal energy market (IEM) completion, and 2030 greenhouse gas abatement targets) will depend on the EU’s ability to develop coherent rules that better align market and climate objectives and facilitate collaboration and resource sharing among Member States. Moreover, transforming the Energy Union from vision to reality will require not only an evolution of the policy framework but also changes to improve the governance of EU energy markets. This policy brief, developed in collaboration with E3G and ClientEarth, recommends establishing a robust institutional and regulatory framework that better aligns the IEM and decarbonisation agendas and ensuring that this framework is based on the key principles of good governance—namely transparency, accountability, and legitimacy. Specific recommendations to ensure that the market design initiative delivers the Energy Union objectives include a) establishing independent regional institutions charged with delivering security of supply and other sector policy objectives at least cost, b) thoroughly reviewing local energy markets, including the role of distribution system operators, the rights and roles of consumers, and the efficient delivery of energy infrastructure, and c) pursuing better implementation of energy regulation through the use of Commission enforcement powers, stronger regulatory oversight of regionalized institutions, and better real-time monitoring and reporting on the competitiveness of markets.