Harvesting Transition? Energy Policy Cooperation or Competition around the North Sea

The Northwest European electricity markets are increasingly becoming intertwined with the advance of the internal market. This implies that national fuel mix policies increasingly have cross-national implications.

The German decision to phase out nuclear energy brought home the message that integration in Northwest Europe has become more than just a paper affair but is part of daily life. With more renewable energy in the future electricity system the need for coordination between Northwest European countries intensifies. Looking at Northwest European countries’ long-term energy strategies, however, it appears that cross-border implications and coordination are only marginally taken into account when thinking about, for example, capacity markets.

With the Pentalateral Forum in mind, CIEP has distinguished five different options with an increasing level of coordination, which they would like to bring to the attention of Northwest European policy-makers. Instead of immediately resorting to coordination at the European level, CIEP recommends smaller steps to bridge the space between unilateral decision-making (national level) and harmonisation at the EU level. This is to manage the risks of national policy producing a non-optimal outcome from a cross-national perspective and to overcome the difficulty of reaching an early agreement with 27 actors.

It seems that the Northwest European countries agree on a host of general energy policy principles, but that the hierarchy in the driving forces of energy transition differs. The coordination options they suggest vary from upfront information sharing on policies with external effects to developing joint policies. CIEP believes that the more progressive forms of coordination such as the latter can only be successful if and when drivers of energy policy are more aligned.

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