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Energy Transition Law and Economics

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Energy Law and Economics

Part of the book series: Economic Analysis of Law in European Legal Scholarship ((EALELS,volume 5))

Abstract

The author analyses the extent to which the energy sector in Europe is suitable for a law and economics approach, especially regarding a policy of energy transition . To this end, the author provides first a short historic overview of energy transitions in the past and of their framework in Europe. Second, the author analyses the aspects of political sovereignty connected with the supply of energy. Third, the legal and political framework for the regulation of the energy sector pursuing an energy transition in the European Union, its Member State Germany, and in Switzerland with the aim to reduce carbon dioxide emissions are analysed in detail. Besides the European Union, a specific focus is placed on Germany and Switzerland because both countries have chosen to end the use of nuclear energy as well. Thus, they will have to implement an even broader energy transition. The author shows how individual choices by the market participants are often rendered impossible because of government intervention. Furthermore, he depicts how attempts to liberalise the energy market are faced with approaches to utilise the remains of the former monopoly like structure of the market for the regulatory objectives of energy transitions. This leads to the question whether the transaction-based approaches of traditional and modern economics remain beneficial in analysing energy law.

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Notes

  1. 1.

    United Nations Framework Convention on Climate Change (UNFCCC), Decision 1/CP.21, accessible at http://unfccc.int/resource/docs/2015/cop21/eng/10a01.pdf [accessed 3 October 2017].

  2. 2.

    Article 28 of the Paris Agreement requires a written withdrawal after a waiting period of 3 years.

  3. 3.

    Article 12a of the revised Nuclear Energy Act.

  4. 4.

    § 7 Atomic Energy Act.

  5. 5.

    In Switzerland, nuclear energy accounted for 33.5% of the total electricity production in 2015, see Bundesamt für Energie (2016), p. 37. In Germany, that share was 14% in 2015, see Statistisches Bundesamt (2016), p. 22.

  6. 6.

    Fraunhofer ISE (2013), p. 2.

  7. 7.

    Bithas and Kalimeris (2015), p. 6.

  8. 8.

    Bithas and Kalimeris (2015), p. 7 et seq.

  9. 9.

    Bithas and Kalimeris (2015), p. 7.

  10. 10.

    For a critical review of state property concerning natural resources, see Lazarus (1986).

  11. 11.

    For the widely discussed case of the village Horno, see Baer (1997). Such expropriations are governed by federal law, §§ 77 et seqq. Federal Mining Act, and the specific expropriation is stipulated in a separate statute.

  12. 12.

    See Akins (1973).

  13. 13.

    It is undisputed that the shortage in supply was affecting the market forces, but that in itself was a regulatory decision by the OPEC-countries.

  14. 14.

    For a discussion of the subsidies granted to this project, see Cernoch and Zapletalová (2015).

  15. 15.

    Case no. T-382/15, ECLI: EU:T:2016:589.

  16. 16.

    Case no. C-640/16 P.

  17. 17.

    Case no. T-356/15.

  18. 18.

    For Switzerland, see BVGer A-7561/2015, E. 4.3.; for Germany BGH KVR 27/04, BeckRS 2005, 08522.

  19. 19.

    OJ 1997 L 27/20.

  20. 20.

    OJ 1998 L 204/1.

  21. 21.

    OJ 2003 L 176/37.

  22. 22.

    OJ 2003 L 176/57.

  23. 23.

    OJ 2009 L 211/55.

  24. 24.

    OJ 2009 L 211/94.

  25. 25.

    See press release IP/16/4009.

  26. 26.

    Scholtka and Martin (2017).

  27. 27.

    BMWi (2017), p. 35 et seqq.

  28. 28.

    Paetsch and Böck (2009), p. 1.

  29. 29.

    BBl 1999 7370.

  30. 30.

    BBl 2002 7821.

  31. 31.

    SR 734.7.

  32. 32.

    BBl 2005 1611, p. 1621.

  33. 33.

    http://unfccc.int/kyoto_protocol/status_of_ratification/items/2613.php [accessed 3 October 2017].

  34. 34.

    COM(2016) 110 final.

  35. 35.

    BBl 2017 317, p. 330.

  36. 36.

    BBl 2016 7683.

  37. 37.

    BBl 2013 7561 p. 7578.

  38. 38.

    For an approach to the internalisation of climate change costs, see Weitzman (2014).

  39. 39.

    https://www.uvek.admin.ch/uvek/de/home/uvek/medien/medienmitteilungen.msg-id-38101.html [accessed 3 October 2017].

  40. 40.

    Article 12a of the revised Nuclear Energy Act (Kernenergiegesetz), which has not yet entered into force.

  41. 41.

    Schmocker and Kalkhof (n.d.), p. 10 et seq.

  42. 42.

    See Esposto (2008) for the Italian referendum of 1987 following the Tschernobyl disaster. In Austria, the ban of nuclear power was introduced in 1978 in the Federal Law on the Prohibition of the Use of Nuclear Fission for the Energy Supply in Austria, BGBl. Nr. 676/1978, following a popular vote against a specific power plant project.

  43. 43.

    Buchdahl Roth and Jaramillo (2017). Of cause, there is a caveat regarding CO2-emissions caused during the establishment of nuclear installations, but that objection equally could be raised against installations of renewable energies.

  44. 44.

    “Common but differentiated responsibilities”, see UNFCCC (2006), p. 23 et seqq.

  45. 45.

    See the list of signatories at http://unfccc.int/paris_agreement/items/9444.php [accessed 3 October 2017].

  46. 46.

    Cf. Plumer (2017).

  47. 47.

    Liu et al. (2017), p. 490.

  48. 48.

    European Council, Conclusions on 2030 Climate and Energy Policy Framework, SN 79/14, p. 2; IETA (2016), p. 3.

  49. 49.

    Article 12 Kyoto Protocol.

  50. 50.

    OJ 2004 L 338/18.

  51. 51.

    Cf. the criticism by Winter (2009), p. 296 et seq.

  52. 52.

    Laing et al. (2013), p. 4.

  53. 53.

    Article 10(1) EU ETS-Directive as amended by Directive 2009/29/EC.

  54. 54.

    EGC, case T-16/04, ECLI:EU:T:2010:54; Heselhaus (2014b), pp. 139–141.

  55. 55.

    Article 21 CO2-Law, SR 641.71.

  56. 56.

    See the comment by the FOEN Swiss Federal Office for the Environment), https://www.bafu.admin.ch/bafu/de/home/themen/klima/fachinformationen/klimapolitik/emissionshandel/schweizer-emissionshandelssystem--ehs-/emissionshandelssystem--ehs---schritt-fuer-schritt.html [accessed 3 October 2017].

  57. 57.

    Article 22 et seqq. CO2-Law, Article 83 et seq. CO2-Regulation (SR 641.711.).

  58. 58.

    https://ec.europa.eu/clima/policies/ets/allowances/electricity_en [accessed 3 October 2017].

  59. 59.

    These are new Member States that joined since 2004: Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Poland and Romania. Latvia and Malta would also have been eligible to use the derogation, but decided not waive this option.

  60. 60.

    For Switzerland, see https://www.swissgrid.ch/swissgrid/de/home/company/electricity_price.html. [accessed 3 October 2017]. For Germany, see Bundesnetzagentur (2016), p. 218.

  61. 61.

    BGH EnVR 32/13, EnWZ 2016, 85.

  62. 62.

    Article 19 et seqq. of the revised Energy Act (Energiegesetz).

  63. 63.

    For Germany, see Lippert and Kindler (2017), p. 258. In Switzerland, the fee for the funding of renewable energy is governed at the federal level, Article 37 of the revised Energy Act.

  64. 64.

    German law mandates that the transmission systems operators charge the extra costs to the electricity supply companies that deliver to the end consumers, § 60 Renewable Energy Act (EEG). In practice, these costs are then charged to the end consumers, Lippert and Kindler (2017), p. 258.

  65. 65.

    EGC, case T-47/15, ECLI:EU:T:2016:281.

  66. 66.

    EGC, case T-47/15, para. 40.

  67. 67.

    ECJ, case C-405/16 P.

  68. 68.

    Article 15bbis(2)(c) EnG.

  69. 69.

    Article 3m(1) EnV.

  70. 70.

    Cleantech Agentur Schweiz (act) and Energieagentur der Wirtschaft (EnAW).

  71. 71.

    For details, see SFOE (2015).

  72. 72.

    ECJ, case C-573/12, ECLI:EU:C:2014:2037.

  73. 73.

    ECJ, case C-573/12, para. 11 et seqq.

  74. 74.

    Article 3(3) Directive 2009/28/EC, OJ 2009 L 140/16.

  75. 75.

    ECJ, case C-379/98, ECLI: EU: 2001: 160, para. 81.

  76. 76.

    Commission Recommendation on the management of financial resources for the decommissioning of nuclear installations, spent fuel and radioactive waste, 2006/851/Euratom, OJ 2006 L 330/31.

  77. 77.

    Section 3 para. 3 Recommendation 2006/851/Euratom.

  78. 78.

    Section 5 para. 7 Recommendation 2006/851/Euratom.

  79. 79.

    Section 6 para. 13 Recommendation 2006/851/Euratom.

  80. 80.

    BVerfG, 1 BvR 2821/11, 1 BvR 321/12, 1 BvR 1456/12. The court ruled that the exit from nuclear energy was mostly in accordance with the constitution, but granted financial compensation to the operators.

  81. 81.

    Agreement between the Federal Government and Electricity Supply Companies (Vereinbarung zwischen der Bundesregierung und den Energieversorgungsunternehmen vom 14 Juni 2000), http://www.bmub.bund.de/fileadmin/bmu-import/files/pdfs/allgemein/application/pdf/atomkonsens.pdf [accessed 3 October 2017].

  82. 82.

    11th Act for the revision of the Nuclear Energy Act, BGBl. 2010 I, p. 1814.

  83. 83.

    13th Act for the revision of the Nuclear Energy Act, BGBl. 2011 I, p. 1704.

  84. 84.

    Gesetz zur Neuordnung der Verantwortung in der kerntechnischen Entsorgung, BGBl. 2017 I p. 14, 1222.

  85. 85.

    Article 12a of the revised Nuclear Energy Act.

  86. 86.

    The first decision to decommission a nuclear power plant has already been made concerning the plant Mühleberg and will take effect in 2019, see https://www.bkw.ch/de/ueber-bkw/unsere-infrastruktur/kernkraftwerk-muehleberg/stilllegung/uebersicht/#Home [accessed 3 October 2017].

  87. 87.

    The nuclear power plant of Beznau I has currently halted production. The plant Leibstadt did not produce electricity for 6 months and has now started producing electricity again, see Neue Zürcher Zeitung. 20 February 2017. https://www.nzz.ch/schweiz/schweizer-atomkraftwerk-leibstadt-wieder-am-netz-ld.146724 [accessed 3 October 2017].

  88. 88.

    The five commercial plants are owned by AEW, Alpiq, Axpo, BKW, CKW, EWB and EWZ. Some of the plants are co-owned by several of these companies.

  89. 89.

    Article 11 Kernenergiehaftungsgesetz, SR 732.44.

  90. 90.

    Verordnung über den Stilllegungsfonds und den Entsorgungsfonds für Kernanlagen, SR 732.17.

  91. 91.

    BGE 142 II 451.

  92. 92.

    Cf. http://www.evupartners.ch/wie-weiter-mit-der-regulierung-der-grundversorgung/ [accessed 3 October 2017].

  93. 93.

    See European Commission, SWD(2013) 59 final, p. 6 et seqq.

  94. 94.

    For a discussion of behavioural law and economics in an energy market context, see Pollitt and Shaorshadze (2011).

  95. 95.

    See to approaches to consumer welfare in Esposito and de Almeida (2018).

  96. 96.

    Schaffhauser and Uhlmann (2014), para. 7.

  97. 97.

    BBl 1988 I 337, p. 376.

  98. 98.

    BBl 1988 I 337, p. 376.

  99. 99.

    Heselhaus (2014a), p. 207.

  100. 100.

    Theobald (2017), para. 19.

  101. 101.

    Theobald (2017), para. 22.

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Acknowledgement

The author likes to thank Ass. iur. Markus Schreiber, University of Lucerne, for assisting in research and analytical discussions.

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  1. Faculty of Law, University of Lucerne, Lucerne, Switzerland

    Sebastian Heselhaus

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  1. Faculty of Law, University of Lucerne, Lucerne, Switzerland

    Klaus Mathis

  2. University of Notre Dame Law School , Notre Dame, Indiana, USA

    Bruce R. Huber

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Heselhaus, S. (2018). Energy Transition Law and Economics. In: Mathis, K., Huber, B. (eds) Energy Law and Economics. Economic Analysis of Law in European Legal Scholarship, vol 5. Springer, Cham. https://doi.org/10.1007/978-3-319-74636-4_2

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