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.