The role of capacity in the EU internal electricity market in the context of the General Court's judgment of 15 November 2018 in case T-793/14 Tempus Energy

• Published in: Energy policy Vol. 143; p. 111530
• Main Author: Zajdler, Robert
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01.08.2020; Elsevier Science Ltd
• Subjects: Adequacy; Capacity mechanisms; Commodities; Commodity markets; Court decisions; Courts; Demand side management; electric power; Electricity; Energy; Energy management; Energy policy; EU electricity Market; European Union; Markets; Questions; Resource adequacy; State aid; Technological change; European union; Capacity mechanisms; Energy policy; Resource adequacy; EU electricity Market; State aid
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2020.111530

Since the judgment in Case 6/64 Costa v ENEL electricity (electrical energy) has been considered as ‘good’ subject to the principle of free movement of goods of the European Union (EU). Although the EU electricity market has undergone fundamental regulatory and technological changes, this qualification still determines the assessment of regulatory solutions. The changes that have taken place have made it possible for resource adequacy to be ensured not only by generators but also by “demand side management”. It changes the market from a single-product market where electricity is the exclusive commodity (‘good’) traded to a two-commodity market where capacity securing resource adequacy is the second product. It raises the question if the capacity is good or service and how it affects qualification of electricity as a good and a model for developing EU regulation based on this assumption. In Case T-793/14 Tempus Energy the General Court challenged the British capacity market which also affected the Polish one, showing the need for delimitation of this concept. The aim of this article is to try to give answers to these questions. The article aims to propose such a delimitation and the consequences that result from for the EU electricity market. •In the model of the EU electricity market customer buys something more than electricity.•Energy security, share of RES, auto production, DSR determine the concept of electricity.•Capacity should be treated as service rather than good in the EU electricity internal market rules.