The legal dimensions of energy security in EU law

The decarbonisation of the energy sector, climate change, ageing infrastructure and the digitalization of energy networks throw policymakers into the midst of a wicked problem. The era of energy transition, as the entirety of these challenges is commonly referred to, poses serious threats to energy security and raises the question on how it can effectively be guaranteed. The issue is of utmost importance, as a lack of access to affordable energy entails far reaching consequences for a country’s economy, society and politics and can cause the loss of billions. Thus, the energy security policy paradigm has gained considerable attention in the European Union (EU) throughout the past decade. In this context, law is very significant. As a regulatory authority, in fact, the EU employs legal tools to achieve its goals and to impose its “will” on national and international actors. It is, thus, the overall legal framework that gives meaning to the concept of energy security within the EU and which determines the aspects that gain relevance in a certain period of time within the EU policy. This master’s thesis investigates the EU’s legal approach to the energy security policy paradigm and aims to show that it can be divided in the legal dimensions of import dependency, network reliability, climate resilience and cybersecurity, which are given different weight and are approached in divergent ways, thus ultimately shaping the relevant meaning of the paradigm. It highlights the EU’s limits as supranational regulatory authority and the solutions it enacts in the attempt to overcome them, by critically analysing the pertinent policy context, the pursued strategies, legally binding and non-binding acts of the EU, and relevant case law on energy security. For this purpose, it is divided in five chapters. The analysis shows that energy security is not a concept that originated from a legal context, but from economic and societal studies. So far, no common agreement on its precise definition and content could be reached. In respect of the EU, the concept energy security is still predominantly framed in the traditional terms of “security of supply”, due to the specific restrictions in legal powers by article 194 of the Treaty on the Functioning of the European Union (TFEU) and the overall importance of the legal dimension of import dependency, in particular regarding natural gas. However, although officially proclaiming a rather anachronistic and narrow definition of energy security, the remaining dimensions highlight a more modern approach which concerns also the segments of transmission and distribution. It is worth noting, though, that these aspects are mostly addressed with reference to the functioning and implementation of the internal energy market. The nexus between energy security and the internal energy market is, indeed, very strong throughout all the legal dimensions and based on the assumption that the full implementation and effective functioning of the latter automatically ensures the former. However, this assumption did not take into account potential market failures, legal voids or impacts of the energy transition – like the missing money problem – as a consequence of which the market price of energy does not deliver the appropriate price signals for needed investments, hence undermining energy security. Other political and legal limits of the EU emerge throughout the analysis. The EU struggles in pursuing its diversification efforts for natural gas due to the complex geopolitical relations with other countries, in primis Russia. Its regulatory framework on the internal gas market entered in conflict with applicable international trade law and was partially declared inconsistent with WTO trade agreements. Moreover, it violated the principle of energy solidarity as referred to in article 194 TFEU. In respect of Nord Stream 2, the EU pursues a questionable lex specialis approach by pushing through an amendment to the Gas Market Directive which would bind Gazprom to the key principles of the internal energy market also in relation to transmission pipelines from third countries. The legal dimension of network reliability highlights tensions with the member states on capacity mechanisms and their compatibility with fundamental EU market rules. The chapter on climate resilience shows difficulties for the EU in establishing a comprehensive framework, be it general or sector-specific. The thesis highlights that a goal of EU energy security policy is not only to keep Russia at bay, but also to tame the member states. Thus, a shift in competences from the member states to the EU can be observed in the energy sector. It concerns, in particular, external energy security competences as well as a stricter approach and less leeway for national discretion in secondary legislation. Lastly, the legal dimension of cybersecurity presents a certain incoherence in the policy approach. While the EU acknowledges the potential cross-border impacts of a cyber-incident occurring in a member state, it ultimately recognizes a primary responsibility of the member states on the matter. It also shows a new approach in energy security policy that moves away from a vertical governance model towards a more horizontal one, in which the EU limits itself to set up the institutional context where the various actors can then develop the necessary policies together.