A comprehensive analysis of integration of EU energy markets and aspects affecting the process of integration between 2000 and 2019

• Název práce v češtině: Souhrnná analýza integrace evropských energetických trhů a aspektů, které ovlivňují integrační proces mezi lety 2000 až 2019
• Název v anglickém jazyce: A comprehensive analysis of integration of EU energy markets and aspects affecting the process of integration between 2000 and 2019
• Klíčová slova: energetická unie, vnitřní energetický trh, vnitřní trh s plynem, Evropská komise, komisář pro energetiku, Vyšegradská čtyřka, integrace
• Klíčová slova anglicky: energy union, internal energy market, internal gas market, European Commission, energy commissioner, Vysegrad Four, integration
• Akademický rok vypsání: 2019/2020
• Typ práce: diplomová práce
• Jazyk práce: angličtina
• Ústav: Katedra mezinárodních vztahů (23-KMV)
• Vedoucí / školitel: Mgr. Jitka Holubcová, M.A.
• Řešitel: skrytý - zadáno vedoucím/školitelem
• Datum přihlášení: 04.05.2020
• Datum zadání: 04.05.2020
• Datum a čas obhajoby: 24.06.2021 08:00
• Místo konání obhajoby: Pekařská 16, JPEK313, 313, Malá učebna, 3.patro
• Datum odevzdání elektronické podoby: 04.05.2021
• Datum proběhlé obhajoby: 24.06.2021
• Oponenti: Mgr. Jan Mazač

Seznam odborné literatury

Baltensperger, T., Füchslin, R. M., Krütli, P., & Lygeros, J. (2017). European Union gas market
development. Energy Economics, 66, 466–479. https://doi.org/10.1016/j.eneco.2017.07.002
Ciucci, M. (2020). Internal Energy Market. European Commission. Retrieved from:
https://www.europarl.europa.eu/factsheets/en/sheet/45/internal-energy-market.
Eberlein, B. (2008). The making of the European energy market: The interplay of governance
and government. Journal of Public Policy, 28(1), 73-92.
Eikeland P.O. (2011) EU Internal Energy Market Policy: Achievements and Hurdles. In:
Birchfield V.L., Duffield J.S. (eds) Toward a Common European Union Energy Policy.
Palgrave Macmillan, New York
European Wind Energy Association (2012) Creating the Internal Energy Market.
Haase N. (2008). European gas market liberalization: Are regulatory regimes moving towards
convergence?. Oxford Institute for Energy Studies.
Ispolinov, A., & Dvenadtcatova, T. (2013). The creation of a common EU energy market: a
quiet revolution with far-reaching consequences. Baltic Region, 2, 78-91.
https://doi.org/10.5922/2079-8555-2013-2-8
Jones, C. W. (2017). The Role of Gas in the EU’s Energy Union. Claeys & Casteels.
Karan, M. B., & Kazdağli, H. (2011). The development of energy markets in Europe.
In Financial Aspects in Energy (pp. 11-32). Springer, Berlin, Heidelberg.
Maltby, T. (2013). European Union energy policy integration: A case of European Commission
policy entrepreneurship and increasing supranationalism. Energy policy, 55, 435-444.
Stern, J., & Rogers, H. (2014). The Dynamics of a Liberalised European Gas Market–Key
determinants of hub prices, and roles and risks of major players.
Vasconcelos, J. (2005). Towards the Internal Energy Market: how to bridge a regulatory gap
and build a regulatory framework. European Review of Energy Markets, 1(1), 1-17.

Předběžná náplň práce v anglickém jazyce

Introduction
European Union is one of a kind institution in current politics. While there are few
areas where the European Commission has sole power over, such as monetary policies,
competition policies or international trade policies, there are policies where Commission has
to cooperate with member states, for example, transportation, agriculture, environment and also
energy.
The energy policy of the European Union is an incredibly dynamic aspect to study. Continual
integration of European markets resulted in the need to establish a common energy market. This spillover
effect emerged in the end of 1990s during Prodi’s Commission when for the first-time
politicians started to discuss possible integration of national energy markets. Back then, the
person responsible for energy portfolio was vice-president Loyola de Palacio who presented
her outlook on energy policy and upcoming liberalization of energy markets. Loyola with her
colleague, a commissioner of internal market and services Bolkestein, conducted the first steps
towards the integration.
Restructuralisation of the national energy markets with the view of creating a single EU
energy market was conducted by four Energy packages, starting in 1996 and the process has
not finished yet. The intention was to integrate not only electricity markets but also open oil
and gas markets aiming to support and strengthen competition between suppliers, ensure
market-based prices and transparency, develop instruments to protect energy-poor and
vulnerable areas, monitor the sector, etc. The electricity market is, in a way, the most developed
one as we can talk about several regional markets within the EU already, and the level of
integration is the most advanced one.
The process of integration was conducted during Barroso’s two commissions and
proceeded by Junker's commission, which delivered the integration to the very end despite the
fact, that some of the regions are not fully integrated as well as others are lacking competition.
It was one of the goals of both commissions to finish building the EU internal gas market. Such
integration was supported by member states as well as the support was enhanced by the external
accidents, such as Annexation of Crimea.
A key representative for the implementation of integration policies was an energy
commissioner, namely Andris Piebalgs, Gunther Oettinger and Maroš Sefčovič who created
instruments started new policies as well as the evaluated outgoing implementation of strategies.


Research target, research question
The main purpose of this research paper is to analyze energy integration policies as well
as the success in the implementation of selected European Commissions. Evaluating the work
of each commissioner responsible for energy matters, this work aspires to identify key factors
that had a major impact on integration. Such factors are divided into three levels: national,
multinational, and external. Furthermore, explaining all the above-mentioned factors hand in
hand with their evaluation and impact, this work intends to recognize possible problems that
current energy commissioner Kadri Simons might face and to draw a possible trajectory
forward for the EU internal gas market. Last, but not least, the results of the analysis of EU energy
integration policies will be verified vie a brief survey sent to V4 stakeholders on a different
perspective on the internal EU gas market.

RQ1: Where were the energy commissioners successful in implementing their integration
policies towards the internal gas market? Where did they fail?
RQ2: What were the factors fuelling the integration process of the internal gas market? What
caused the slowdown in the integration process?
RQ3: What problems might Kadri Simons face in her office?
RQ4: Where lies the core of the problem in integrating V4 countries into the internal gas market?
Are integration problems of V4 countries similar to union problems indicated in RQ2?

H1: Even though the internal gas market is not finished yet, the European Commission has done
its utmost to facilitate the integration of its member states to the internal gas market.
H2: European Commission failed to achieve a common internal market because of a lack of
interest and apathy from member states.
H3: Unpredictable external affairs are believed to be the engine for completing the integration
of the internal energy market
H4: Geography is predicted to be the main factor complicating finishing the process of the
integration of the internal gas market.
H5: The problem in integration of V4 countries to internal energy market lies in their
underdeveloped infrastructure and unwillingness to lose control over the stakeholders.


Literature review
Regarding the topic, there has not been anyone who would evaluate the last three European
Commission and their work on the internal energy market. The idea of an internal energy market
sparked up early in 1988. Eikeland (2011) analyzed the “common carrier” system for gas and
electricity which concerns agents who should operate supply gas and electricity infrastructure
independently from producers and suppliers. On the other hand, Haase (2008) examined
the developments of regulatory regimes in the European gas market in EU15 between 2000 and 2005.
Stem & Rogers (2014) described aspects of market transition towards liberalization which can
be viewed as challenges, opportunities, and threats. They elaborated on the roles of key players in
the liberalized gas market and what risks those key players face in the liberalization of the market.
Furthermore, Eberlein (2008) was focused on the efficacy of sectoral governance mechanisms is
obliged by conflicts between sectoral interests and national authorities where the European Commission
“a double shadow of hierarchy over sectoral governance agents.” Ispolinov &
Dvenadtsatova (2013) explored changes in EU energy structure and legislation and stages in
the creation of the internal energy market. The notion Maltby (2012) brought enriched academia with
the agenda-setting of the European Commission concerning the problem that newly EU accessed
states with gas supplies. Karan & Kazdagli (2011) aimed to shed a light on the evolution of EU
energy market vis-à-vis regional ones “in accordance with the market efficiency criteria and
financial aspects of energy.” In his book, Jones (2017) focused on the energy union as a whole and
specifically the role of secure gas supplies as an engine for integration. Last, but not least,
Baltensperger, Fuchslin, Krutli & Lygeros (2017) analyzed the development of the European gas
market and its impact on social welfare and security of gas supplies.


Conceptual and theoretical frameworks
The main concept this research paper works with is the “internal energy market” itself, in this
case, narrowed down to the sector of natural gas. The objective of the internal energy market is
harmonization and liberalization of national markets on the union level thanks to certain
measures. Such measures aim to “build a more competitive, customer-centered, flexible, and
non-discriminatory EU … market with market-based supply prices” (Ciucci, 2020). In
electricity and gas, the liberalization was conducted by Four Energy Packages which handed
over the competences from nation-states to the EU (Ciucci, 2020). The internal energy market is a
result of a further integration process aiming not only for the free flow of goods, services, and people
but also energy, such as gas or electricity. The internal energy market creates common rules applied
for all member states aiming to open their national markets (Vasconcelos, 2005). The internal
market requires cooperation among member states assuring the security of energy supplies thanks
to reliable infrastructure. Additionally, “the Member States will ensure market-based price
competition between suppliers; protection of energy-poor and vulnerable household customers;
entitlement for final customers to electricity provided by a supplier, subject to the supplier’s
agreement, regardless of the Member State in which the EU-compliant supplier is registered”
(Ciucci, 2020).


Methodology
For the purpose of this research thesis, content analysis is the main method of
examination. Content analysis strikes a position as a qualitative method of analysis. It examines
texts such as documents, agreements, and other official papers into depth (Hsieh & Shannon,
2005). In our case, directed content analysis is an essential option for analysis since there is
already an existing concept of integration. With this approach, the main goal is to “validate or
extend conceptually a theoretical framework or theory” (Hsieh & Shannon, 2005). The results
achieved by directed content analysis will either support and refine or non-support the chosen
theory. One of the biggest challenges of this approach is the likeability to find evidence that is
rather supportive than challenging to the theory.
The main source for conducting the analysis are official EU documents and working papers
published by the European Commission or Agency for the Cooperation of Energy Regulators
(ACER). Additional sources are Internal Energy Market (IEM) directives and resolutions
agreed in the European Parliament, which has had also significant impact on the creation of
internal gas market. To a certain point, official speeches might be used as a source of evaluation
of implemented policies. Last but not least, academic articles as a secondary source are used
for evaluation and critical insight on implemented policies.
On top of that, a brief survey will be handed over to the stakeholders from V4 countries
to achieve an evaluation of the integration process from different perspectives. The position of the
stakeholders is important due to the fact that their viewpoint will show a general V4 stance on
the topic and their comments where the policies failed or were successful. Thus, up to five
questions will be asked in order to broaden the enrich this thesis with a particular case study
concerning the sector affected the most by building the internal gas market.


I) Introduction
1) Definition of EU Internal Energy (Gas) Market in time and its pertinence today for research
II) Methodology
1) The concept of content analysis and its use in this thesis.
2) Validating the results of the content analysis via semi-structured interviews with V4 stakeholders and pertinence of the V4 region for the creation of EU Internal Gas Market
III) Practical part
1) Content analysis of selected EU documents for the purpose of analyzing RQs:
1a) How successful were gas market integration policies of selected commissioners?
1b) What were the main obstacles? (internal, external, domestic)
1c) What obstacles persist today and in the future?
2) Validating the results of the content analysis via semi-structured interviews with V4 stakeholders and pertinence of the V4 region for the creation of EU Internal Gas Market - results
IV) Conclusion