Internal and external regionalisation of energy policies: the European Union's market governance approach

Abstract

This paper analyzes the regionalisation of energy policies in the EU. Contrasting with broader concepts of regionalisation, the paper proposes a narrow spatial definition of the concept with policy oriented and economic functions. The concept of regionalisation can then be used in order to analyse processes inside the regional system of the EU and outside the EU. Focusing on the policy level, the article proceeds with an overview of energy market developments and regulatory governance for the analysis of regionalisation processes in the framework of energy policies, putting special emphasis on the regional challenges the Commission was facing in its attempt to liberalise energy markets. The following two sections stress the internal regionalisation of energy markets through regional regulatory cooperation and the external regionalisation by setting up regional cooperation platforms with third party countries, according to their function for European energy supply and their geographical location. The European Neighbourhood Policy and the Energy Community for South-Eastern Europe serve as models for this rather new trend in European energy policies. The paper concludes that internally, regionalisation could lead the way to a functioning market for electricity and gas in the EU and externally deliver a higher degree of energy security and improved investment conditions in partner countries.