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Journal of World Energy Law and Business, 2016, 9, 1-16
doi: 10.1093/jwelb/jwv039
Advance Access Publication Date: 17 December 2015
Article
A case of: who will tell the emperor he has no
clothes? market liberalization, regulatory
capture and the need for further improved
electricity market unbundling through a
fourth energy package
Eva Barrett*
ABSTRACT
On 25 February 2015, the European Commission published a Communication on its vision of an
Energy Union as, amongst other things 'an integrated continent wide energy system where energy
flows freely across borders based on competition and the best possible use of resources and with ef-
fective regulation of energy markets at EU level where necessary'. The Communication listed the ac-
tions necessary to deliver this Energy Union in a list which was as interesting for what was not
included as for what was. While full implementation and enforcement of existing energy and related
law (and particularly the third energy package) was listed as the first priority of the Union, there
was no mention of the need for further market unbundling or a fourth energy package. This position
is worrying. Through an inadequate implementation of poorly designed market structures, the EU
has created national markets which are hotbeds for consumer-damaging market manipulation and
abuse. Consequently, there is a pressing need for further market unbundling and a fourth energy
package. Not only will such measures be essential to the successful creation of an Energy Union and
the realization of the benefits expected from market liberalization, they are urgently needed to re-
move existing market structures, which are facilitating consumer-damaging anticompetitive behav-
iours by making such behaviours virtually impossible to detect and punish.
1. INTRODUCTION
Europe's electricity markets are currently in a state of change. In 1996, the EU took the radical decision to
adopt legislation to initiate the gradual process of removing the original electricity market structures, which
had supported state-owned monopolies (a practice known as market liberalization).1 To do this, the EU
decided to unbundle or separate the management and operation of electricity networks from the activities of
electricity production and supply. The aim of this move was to allow competition to develop among
* Eva Barrett, Lecturer in Law (Maynooth University); Adjunct Assistant Professor (Trinity College Dublin). Email: barretev@tcd.ie. First
and foremost, I would like to thank Martin O'Neill (McCann FitzGerald); Jim Barrett; Kate O'Callaghan, Peter Roberts and the referees
for the JWELB. I would also like to thank Dr Raphael Heffron (Queen Mary University of London); the UK Energy Law and Policy
Association and all those present at its annual event on 11 September 2015 for the insightful presentations and discussions and the useful
comments and questions on an earlier draft of this paper. The usual disclaimer applies.
1 Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal mar-
ket in electricity Official Journal [1997] OJ L27/20 ('the first energy directive').
© The Author 2015. Published by Oxford University Press on behalf of the AIPN. All rights reserved.
. 1](ViewImageLocal?handle=hein.journals/jlowdeylw9&div=1&collection=&method=preview&ext=.png&size=3)
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