New energy security regulations. Interview with Jerzy Dudek

20.05.2017 | By Jerzy Dudek and Pawel Musiałek

What are the most important consequences of the recently revised EU key instruments regarding energy security, namely the regulation on security of supply (SoS) and the decision on intergovernmental agreements (IGA)?

First of all, these two instruments are first implementations of the Energy Union Strategy – an all-encompassing plan to develop EU energy policy – that was launched in 2015. Energy security is one of its five areas and was as the first issue considered in the long EU legislative process. As far as the new SoS Regulation is concerned, there are three central issues. First, the solidarity principle. In the event of a severe gas crisis, neighbouring Member States will help out to ensure gas supply to protected customers (households and essential social services). Second, closer regional cooperation. Member States are divided into risk groups that will facilitate the joint assessment of common security of supply risks and the development of an agreement on joint preventive and emergency measures. Third, greater transparency. Natural gas companies will have to notify long-term contracts that are relevant for security of supply (28 % of the annual gas consumption in the Member State). The new IGA Decision brings progress on one crucial issue relating to compatibility check with EU law of Member States’ international agreements. In the gas and oil area, IGAs will be checked obligatory by the Commission before a Member State enters such an agreement. Additionally, on a few instances the mechanism of information exchange has been strengthened.

Do the revised pieces of legislation fulfill expectations of Poland?

To rather great extend they do. In particular the IGA Decision can be seen as quite a success. It offers a good instrument to the Commission in order to make sure that Member States do not act externally in a way that would breach EU law and therefore undermine the solidarity between Member States. Some more far-reaching proposals in this context did not go through but still the IGA Decision could become in the future a good instrument for the EU to enhance its external energy policy. Much, however, will depend on the will and the capacity of the Commission in this respect. The mere legal instrument is just a good basis for future initiatives. The amended SoS Regulation seems less of a success but without doubt it offers a clear progress comparing to the similar regulation of 2010. The process of negotiations was much longer and more complicated than in case of the IGA Decision since the regulation was touching a greater number of vested interests. The proposal of the Commission, which was supported by Poland, was considered by some as controversial and fiercely criticised. The solidarity principle is a very important development as it introduces a legally binding mechanism. There are some details (regarding for example the definition of protected customers or the launching of the mechanism) that lead to softening of the mechanism but this does not change the big picture. Also the increased transparency of contracts in the gas sector should have a positive effect in better addressing security issues. Energy security stress tests of 2014 clearly showed that there was simply not enough of available information to efficiently manage a potential energy crisis. The increased transparency should offer some improvements in this respect. Setting up regional cooperation in energy security issues would be a very important step forward. It remains to be seen whether the idea of 13 risk-based regions (instead of 9 geographic regions) will deliver better coordination and planning.

What more should be done by means of EU regulation to strenghten energy security in the EU?

At this stage the key issue is the implementation of recent changes. One thing is to introduce something into law and another thing is to make it up and running in specific situations. Improvements that I could suggest concern two more general issues. The first is to see security of supply as a legal requirement and not merely a political matter. Moreover, it is not only EU legislation that places certain duties in this respect on the EU and Member States. It is, most importantly, Article 194 TFEU that forms the security of supply objective. This objective should have an identical weight as the objective of ‘ensuring the functioning of energy market’. The second issue is the link between internal energy policy and external energy policy. The lack of the latter poses a threat for the former. This can be well seen in the case of Nord Stream 2. If the EU decides that EU law should not be extended to the non-EU part of the gas pipeline, then the uniform application of EU law within its territory – the EU part of Nord Stream 2 – could be put in question.

Interviewee: Jerzy Dudek (lawyer and political scientist, Warsaw University and Cambridge graduate, researching on external dimensions of EU energy policy at EUI, Florence)
Interviewer: Paweł Musiałek (political scientist, Member of the Board of the Jagiellonian Club)

International_Visegrad_Fund,_emblemo_bluaThis text was created thanks to support of International Visegrad Found.

Photo: from Author’s resources