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24th Oct 2020

EU states enter bidding contest for new energy body

  • The plan to set up the Agency for the Cooperation of Energy Regulators (ACER) was given the green light in April 2009. (Photo: www.nord-stream.com)

Sweden is set to inherit the thorny problem of where to place a number of newly-born European agencies when it takes over the EU presidency on 1 July.

Earlier this week, three EU states - Romania, Slovakia and Slovenia - indicated their interest in hosting the new energy body, proof that the dossier is gaining in political influence. All three bidders expect the contest to be "quite tough."

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"It is mainly a matter of prestige," says Piotr Kaczynski from the Brussels-based Centre for European policy studies. He points out that a host does not have a "privileged influence" over how an agency functions.

His colleague and energy regulation expert, Christian Egenhofer, also predicts "fierce competition" as European agencies generally tend to expand, create other business opportunities as well as exposure for a country.

The idea to set up the Agency for the Cooperation of Energy Regulators (ACER) was given the green light in April 2009 - together with rules to further liberalise the union's gas and electricity market.

The year and a half long process saw heated debate over whether to break energy giants into production and supply wings as well as wrangling - although less visible - over the ACER's future powers.

Several EU capitals were quick to make sure that the agency - foreseen to receive up to seven million euro from EU coffers each year and employ some 40 to 50 people - would not curtail the powers of national regulators.

In the end, the agency secured legally binding powers over disputes involving cross-border pipelines and networks, should national operators fail to agree on a solution.

As the energy market further integrates and member states become more confident working under its umbrella, the agency is likely to expand its competencies and cover more topics, Mr Egenhofer predicts.

Greece and Cyprus briefly flirted with the idea of hosting the agency, but the contest has finally narrowed down to three capitals - Bucharest, Bratislava and Ljubljana.

It is difficult to pin down major differences in the official pamphlets as all candidates underline their belief in a single European energy market, their expertise in the sector, their ideal geographical position or the high quality of life in their cities.

Romania is presenting itself as "an important actor of the regional energy market in South-Eastern Europe" involved in developing key European energy projects.

Slovenia also stresses that it stands "at the cross-roads of the EU energy market" due to the country's connection to southern Europe.

Slovakia, for its part, has highlighted that its capital is well connected to other European cities such as Vienna, Prague, Warsaw or Maribor.

Both Bratislava and Ljubljana also underline their Schengen - the EU's borderless zone - and eurozone membership.

Trade-offs?

The agency's future seat will be first discussed on 12 June when EU ministers in charge of energy meet in Luxembourg. The Czech EU presidency aims to see whether any of the three bidders is capable of securing convincing support among their colleagues.

However, the issue is likely to fall on the shoulders of the upcoming Swedish EU presidency, with diplomats suggesting Sweden could aim for a package deal involving the ACER as well as the EU's satellite navigation programme, Galileo, and the EU office to coordinate asylum issues.

Such an approach could allow candidates to barter their way to success as the process is traditionally accompanied by fierce national lobbying and trade-offs.

While Romania has never applied for an agency seat, Slovenia is now also bidding for the Galileo project. In the past, Ljubljana failed to get Frontex, the agency responsible for security of the union's external borders, as well as the European Institute for Gender Equality.

Similarly, Slovakia is trying its luck for the third time, after losing the gender equality institute to Vilnius and the European Institute of Innovation and Technology to Budapest.

Growing influence

According to Mr Kaczynski, energy is now one of the EU's top five priorities and more EU governments are likely to stand in line to get an energy portfolio in the next European Commission.

"In principle, there is massive understanding that we are interdependent and energy is the topic that must be dealt with jointly," he says, describing the energy portfolio as "crucial."

Of the three bidders for the ACER's seat, Bratislava is also interested in having a Slovak be the energy commissioner.

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