Compliance and Regulation Law bilingual Dictionnary

Energy

by Marie-Anne Frison-Roche

Almost all energies are products whose economic circuit is regulated, in a more or less homogeneous way. Thus, gas and electricity are often regulated by the same authorities, as in France, regulation entrusted to an authority which in 2000 was first the Commission de Régulation de l’Électricité - CRE (French Commission of regulation of the electricity) to become the Commission de Régulation de l'Energie -CRE (French Commission of regulation of the energy), extending its competence to gas. Renewable energies, such as photovoltaic (solar panels), or wind energy (wind) or energy through water (dams) are more subject to State plans in the hands of the traditional administration. As for oil, it is currently regulated only through an agreement between producing countries, OPEC (Organization of Petroleum Exporting Countries), which smooths the market movements  with the perverse effects that are known.

Energy is a regulated sector because at the same time it is made up of scarce resources (except the renewable energy hypothesis, which is currently privileged and elevated to the rank of European policy) even though energy is the support of all ordinary markets for goods and services since there can be no economic activity without an efficient and reliable energy system over the long term.

As regards transport, which is based on the control of an essential infrastructure, Community aw still tolerates that the companies which manage it remain the property of the incumbent operators of which they are the subsidiaries, There is an accounting separation between its producers and its managers, consolidated by a distinction of legal personalities. The network operator is a "crucial operator", since all energy is a network industry. It therefore has multiple public service obligations, in particular to assure th buyers' and sellers"e right of access of energy. It is common for disputes to arise between the latter and the network operator, which are then brought before the regulator, in France the CRE giving a solution ;;  its decision may be challenged before the Court. The distribution activity is closely linked to the transport activity in terms of energy, and the same difficulties with respect to access to the meter are not found in access to the meter to the local telecommunication loop.

Moreover, acts of sales and purchases in the energy sector are not part of a competitive logic. Often, it is still the Government that sets the selling price of electricity and gas, while oil Is left to the price resulting from an agreement between dominant producers of the market. France has experienced the saga of the possibility for consumers to leave the regulated price system to adopt the free price, the French Parliament by the law of 10 July 2008 having chosen to leave the free prices to return to the regulated prices if they are more favorable to the consumer.

We therefore see that the aim of energy regulatory system is to open up to competition but also to optimally manage these scarce resources, which are rare even when they are indispensable. That is why the nuclear issue is central to the countries that have made the choice and are continuing to do so. The issue of energy transition is now a major major issue. In France, it is now based on the Law of 17 August 2015 on the Energy Transition for Green Growth. Here we see how long-term regulation, industrial policy and innovation are linked.

Finally, energy generates activity both at very long term and at very high risk. This is why it does not support the simple mechanism of the competitive market. We must think of this sector as the banking sector because it is characterized by systemic risks, the system not being able to authorize itself for example a nuclear explosion. The Californian energy crisis is equivalent to a financial crisis. Energy requires decennial planning and considerable investment. States are required.

 

 

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