The Third European Energy Liberalization Package: Does Functional and Legal Unbundling in the Gas Storage Sector Go Too Far?

35 Pages Posted: 22 Jul 2008 Last revised: 7 Nov 2014

See all articles by Ming-Zhi Anton Gao

Ming-Zhi Anton Gao

KU Leuven - Institute of Energy and Environmental Law; Institum Iurisprudentuae, Academia Sinica

Date Written: July 21, 2008

Abstract

The third European gas liberalization package (the 3rd Package) is intended to facilitate access to gas storage through the introduction of functional and legal unbundling in the storage sector. This article will challenge this new regulatory regime from two perspectives. First, this new regime may change the originally coherent regulatory patterns and regulatory hierarchy in the 1st and 2nd Gas Directive without taking into account the economic rationales. Second, this new regime will lead to three serious concerns, i.e. the cost-effectiveness and clear implementation of the unbundling, and the doctrine of 'rigid unbundling as a last resort, when implementing. In this regard, for remedy purpose, this article provides three legislative suggestions to the 3rd Package. However, in spite of these efforts, the issue of the unclear scope of storage subject to the open access regime and to the functional and legal unbundling remains unresolved in the 2nd Gas Directive and 3rd Package. Thus, to facilitate access to storage, it is suggested that the Commission may have to clarify the scope issue first and consider adopting a more direct approach, i.e., the regulated third party access regime for the storage sector, in the 3rd Package, instead of an indirect approach of further unbundling.

Keywords: gas storage, functional and legal unbundling, Directive 2003/55/EC, Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/55/EC concerning common rules for the internal market in natural gas

Suggested Citation

Gao, Ming-Zhi Anton, The Third European Energy Liberalization Package: Does Functional and Legal Unbundling in the Gas Storage Sector Go Too Far? (July 21, 2008). Available at SSRN: https://ssrn.com/abstract=1167793 or http://dx.doi.org/10.2139/ssrn.1167793

Ming-Zhi Anton Gao (Contact Author)

KU Leuven - Institute of Energy and Environmental Law ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Institum Iurisprudentuae, Academia Sinica ( email )

128 Academia Sinica Rd., Sec. 2
Nankang
Taipei City, 11529
Taiwan

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