The credit for calling our attention to this consultation goes to Luís de Souza; relayed to us by Jérôme, who is away for this week.


*Traitor*, n.
A benighted individual who perceives an illusory distinction between serving his nation and abetting the criminals who govern it.

Here is a preemptively drafted general point that I thought it may be worth to make.

Energy policy vs. "undistorted competition"

The formulation of a proper energy policy is impeded by a mistaken sense of what competitiveness on a market is, especially on an energy market.

Markets exist in a market environment. Which competitor thrives on a market and which doesn't is determined by how well they can adapt to a given environment. Thus, competitiveness is not an absolute, but a function of the market environment. One can't divorce market and market environment. And beyond the potential of technologies, resource (and capital) availability, and geography, this environment also includes regulations.

From the above, it also follows that no change in regulation can be 'neutral', not even the removal of a general regulation: every change in regulation 'distorts' the market. In particular, on the electricity market, different types of power plants have different price structures -- fuel costs dominate for gas, upfront costs for wind or nuclear, etc. --, thus, for example, a general change in fuel taxes or long-term planning requirements can cause a modal shift.

Thus,

• for a proper energy policy, policymakers first have to recognise that they are setting energy policy, whatever they do, and they should better do so consciously.

• Given the goals of sustainability and reduction of import dependence, the primary and explicit aim on the field of regulations should be the favouring of renewables.

A mere statement of the aim doesn't suffice. It should also be avoided that Member States listen to the established industry players when setting up regulation. For example, in Hungary, the scope of a feed-in law for renewables was capped, because ostensibly the grid won't sustain a higher grid penetration. While the EU as policymaker could and should intervene in such cases by bringing in contrary experience from other Member States, it is even more important to recognise an underlying motivation: established producers stand to lose market share.

Thus,

• there should be an explicit recognition that established producers are to lose market share (that is, unless they invest massively in renewables themselves). Decisionmakers should be conscious of the conflict potential, and should wage a conflict when making policy.

*Traitor*, n.
A benighted individual who perceives an illusory distinction between serving his nation and abetting the criminals who govern it.

1. The main barrier to the development of an European grid is the lack of a strong and well-financed public initiative on the basis of long-term plans. Neither regional, nor national, nor EU-level policy should be based on expecting advice and solutions from established utilities.
   
   The EU should act directly on cross-border lines, and get involved in the setting of the goals for national and regional policies (f.e., requiring that grid policies are aimed at ensuring access to the grid for new renewable producers).

2. The EU should get involved in local disputes when stated EU goals would be adversely affected, e.g. the spread of renewables. If the legal framework was set up (see 1.), the EU should demand action in the spirit of the stated goals of grid policy.

3. -

4. The most important activity for the EU in network development is ensuring that utilities give (and can give) access to new renewables producers. (Am I sounding like a broken record?)

5. My strong personal view is: no, the EU should not get more involved in facilitating infrastructure projects in third countries. The EU should focus all its power on energy independence. Member States and private companies will provide for investments into extra-EU projects that will serve EU energy imports all on their own if they like.

*Traitor*, n.
A benighted individual who perceives an illusory distinction between serving his nation and abetting the criminals who govern it.

Electrical grid design is a very tough technical problem, and those problems have to be factored into any pricing structure. As a starting point, one would have to know what the current European grid looks like. How is it interconnected? How far into Africa and Asia does it extend? Is it synchronous throughout? What are the organizations responsible for maintaining frequency and voltage stability? What are the isolation policies when a segment fails? How does the existing pricing model account for demand changes? What is the market structure for the reactive power, and how is are the technical problems related to the separation of generation from distribution handled?

I suspect that there is a sophisticated system in place to handle issues of this sort, and that any realistic proposal to change the power grid marketplace would have to be vetted and approved in the context of this existing system...

... we see that the current ET architecture is sub-optimal for this kind of structured reaction.

I'd like to get back to this but (like yours, I guess) my time is limited these days. Now we could do a 'DoDo and nanne write the ET position' exercise, but we'll at least need feedback...