The Quest for Regulatory Stability in the EU Energy Market: An Analysis Through the Prism of Legal Certainty

Abstract

Given the capital-intensive and long-term nature of the energy and low-carbon infrastructure, investors repeatedly highlight regulatory stability as an essential precondition to the transfer of private capital and technology to the development and decarbonisation of energy supply. The Third Energy and Climate Packages have amended the framework governing the EU energy market in order to respond to this investment concern. These legislative packages however do not provide market actors with directly enforceable stabilisation guarantees. This article argues that the principle of legal certainty can “give teeth” to the recent recognition by the EU institutions that stable “rules of the game” are key for the proper functioning of the internal electricity and renewable energy markets. States that create regulatory structures to attract private capital and technology in the decarbonisation and security of energy supply cannot subsequently change the rules of the game once investments are made and costs are sunk.