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Herbert Smith Freehills EUROPEAN ENERGY HANDBOOK A SURVEY OF THE LEGAL FRAMEWORK AND CURRENT ISSUES IN THE EUROPEAN ENERGY SECTOR LEGAL GUIDE ELEVENTH EDITION 2019 - 2020 Legal advice Please note that the content of this publication does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances. The deadline for the submission of chapters was 31 January 2019. EEH - THE EUROPEAN ENERGY HANDBOOK 2019 - 2020 01 Foreword Welcome to the 2019/2020 edition of the As always, I am grateful to the colleagues across Europe who European Energy Handbook! have contributed to this edition. In addition to contributions for the European Union, Belgium, I am delighted to introduce the 2019/2020 edition of "The France, Germany, Ireland, Italy, Russia, Spain, and the United European Energy Handbook", which provides an in-depth survey Kingdom from our own offices, this year we have contributions of current issues in the energy sector in 42 European jurisdictions. from Schoenherr (Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Moldova, Montenegro, This year's edition focuses on recent legal and commercial Romania, Serbia, the Slovak Republic and Slovenia), Loloçi & developments in each jurisdiction, and covers issues such as the Associates (Albania), Kromann Reumert (Denmark), Ellex Energy Union, the adoption of the latest package of EU energy Raidla (Estonia), Roschier (Finland and Sweden), Kyriakides legislation, the 'Clean Energy for All Europeans' bundle of Georgopoulos (Greece), BBA//Fjeldco (Iceland), Meitar directives and regulations updating the EU's energy policy Liquornik Geva Leshem Tal Law Offices (Israel), Kinstellar framework to facilitate the decarbonisation of the sector and (Kazakhstan), Cobalt (Latvia and Lithuania), Arendt & the transition towards cleaner energy. Medernach (Luxembourg), Zammit Pace Advocates (Malta), Houthoff (the Netherlands), Karanovic & Partners (North Climate change, the energy transition and associated Macedonia), Arntzen de Besche Advokatfirma AS (Norway), challenges are strong themes in nearly all of the contributions WKB Wierciński, Kwieciński, Baehr (Poland), Campos Ferreira, of this edition – as each jurisdiction aims to meet its EU Sá Carneiro & Associados (Portugal), Homburger (Switzerland), renewable energy obligations by 2020 and beyond. Other Kolcuoğlu Demirkan Koçaklı (Turkey), and Avellum (Ukraine). topics in this edition include the increasingly important role of electricity storage, new nuclear projects, the progress of Finally, special thanks are due to Barbara McNulty who has privatisations, new gas and electricity interconnectors, the worked tirelessly to make this edition of the European Energy emergence of subsidy-free renewable energy projects in a Handbook a reality and without whom this project would not number of jurisdictions as well as the growing role of electric have been possible. vehicles, the need for charging infrastructure, and their impact on electricity grids. Happy reading and best wishes, At the time of writing, the exact shape of Brexit is as yet unclear. Silke Goldberg Wider political implications for the UK and the EU aside, Brexit will also have an impact on the energy sector, as it puts into Partner, Herbert Smith Freehills LLP question the continued coupling of the British (and, indirectly, November 2019 the Irish) electricity markets to the EU energy markets, and the current electricity and gas trading arrangements between Great Britain and the EU. 02 HERBERT SMITH FREEHILLS Contents 01 Foreword 345 Moldova 03 European Union 357 Montenegro 32 Albania 367 Netherlands 42 Austria 383 North Macedonia 53 Belgium 395 Norway 65 Bosnia and Herzegovina 408 Poland 75 Bulgaria 422 Portugal 85 Croatia 433 Romania 101 Czech Republic 446 Russia 112 Denmark 458 Serbia 125 Estonia 473 Slovak Republic 133 Finland 481 Slovenia 148 France 491 Spain 186 Germany 502 Sweden 205 Greece 514 Switzerland 219 Hungary 523 Turkey 232 Iceland 538 Ukraine 242 Ireland 550 United Kingdom 254 Israel 581 Legislation 267 Italy 587 Glossary 280 Kazakhstan 594 Overview of the legal and 305 Latvia regulatory framework in 41 jurisdictions 312 Lithuania 654 Overview of the renewable 323 Luxembourg energy regime in 41 334 Malta jurisdictions European Union European EEH - THE EUROPEAN ENERGY HANDBOOK 2019 - 2020 03 Overview of the legal and regulatory framework in the European Union Silke Goldberg, partner, and Barbara McNulty, paralegal, Herbert Smith Freehills Introduction and scope ••achieving greater transparency on energy costs and prices by producing reports on energy prices and analysing the role of Europe’s energy transition from an economy driven by fossil taxes, levies and subsidies, and taking action to protect fuels to a low-carbon society has progressed well in the past vulnerable consumers through social policies; few years and the European Commission’s (“Commission”) vision1 of an Energy Union is continuously moving closer to ••reviewing relevant energy efficiency legislation and completion. What was once mere policy is now steadily proposing revisions; becoming reality on the ground. New legislation has been ••developing a ‘Smart Financing for Smart Buildings’ initiative formally adopted and non-legislative initiatives introduced to make buildings more energy efficient; to further the objectives of securing clean energy for Europe. ••proposing legislation to achieve greenhouse gas (“GHG”) Energy Union reduction targets, and facilitating investment in heating and cooling; The Energy Union envisaged by the Commission is based on the European Union’s (“EU”) energy policy objectives of ensuring ••proposing a comprehensive road transport package that a secure, sustainable, competitive and affordable energy supply promotes more efficient pricing of infrastructure; 2 to EU consumers that facilitates the free flow of energy across ••proposing legislation to achieve the agreed GHG reduction 3 borders and a secure supply in every EU Member State. The target both in the Emissions Trading System (“ETS”) and for Energy Union is implemented through the Energy Union sectors not in the ETS; Package, which is a framework strategy formulated to achieve the Energy Union. ••proposing a European energy research and innovation (“R&I”) approach towards energy and climate-related technology and The Energy Union Package was adopted by the Commission in developing an initiative on global technology and innovation 2015 and sets out the Commission’s goals in five interrelated leadership to create jobs and economic growth; and policy dimensions: energy security, the internal energy market ••revitalising the EU’s energy and climate diplomacy to make (“IEM”), energy efficiency, decarbonisation of the economy, and full use of trade policy to promote access to energy sources research, innovation and competition. The adoption of the and foreign markets, and to strengthen the EU’s energy package created new momentum to bring about the transition cooperation with third countries. to a clean energy, low-carbon, secure and competitive Energy Union. The package promised to accelerate the integration of The Energy Union strategy as set out in the Energy Union European energy markets through delivering on the actions as Package began to make major strides to live up to its promise set out in the framework strategy. when, in 2016, the Commission presented the Clean Energy for All Europeans Package. This package proposes measures that 4 These actions include: provide a legislative framework within which the transition to ••ensuring full implementation and strict enforcement of clean energy can be facilitated and completed, and is a existing EU energy and related legalisation, in particular the significant milestone in the road towards the creation of the Third Energy Package (“TEP”); Energy Union. The Clean Energy for All Europeans Package aims to enable the EU to deliver on its commitment in the Paris • • diversifying the EU’s supply of gas and making it more Agreement and, in so doing, help the EU energy sector become resilient to supply disruptions; more stable, competitive and sustainable. ••ensuring intergovernmental agreements (“IGAs”) comply fully with EU legislation and are more transparent; Climate action ••supporting the implementation of major infrastructure The Paris Agreement sets out a global action plan to achieve projects, particularly Projects of Common Interest (“PCIs”); a long-term goal of putting the world on track to limit global warming to below 2°C above pre-industrial levels and pursue ••proposing legislation on security of supply for electricity to efforts to limit the temperature increase to 1.5°C. Under the create a seamless internal energy market; Paris Agreement, Governments agree to set ambitious targets ••reviewing and proposing actions to reinforce the TEP legislation to reduce emissions and build resilience to the adverse effects framework, in particular in relation to the Agency for the of climate change. The entry into force of the agreement less Cooperation of Energy Regulators (“ACER”) and the European than a year after its adoption indicates a willingness to take Network for Transmission System Operators (“ENTSO”); action against the effects of climate change. ••developing guidance on, and actively engaging in, regional cooperation; European Union European 04 HERBERT SMITH FREEHILLS The EU’s efforts to fight climate change and contribute to the obligatory ex-ante assessments of IGAs by the Commission. objectives
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