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Legal challenges in the Infrastructure Package: A Perspective from Administrative Law

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Olaf Däuper (BBH) presents at the Vienna Forum on European Energy Law, 2013

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Legal challenges in the Infrastructure Package: A Perspective from Administrative Law

  1. 1. Legal Challenges in the Infrastructure Package – A Perspective from Administrative Law Dr. Olaf Däuper Vienna, 8 March 2013
  2. 2. 00766-13/2002249 About us § BBH has been operating as a law firm since 1991. § We are a partnership of lawyers, auditors and tax consultants – with engineers and further experts in our BBH Consulting. § A staff of over 450 employees, including more than 200 professionals, are at your service. § We provide advice to more than 3,000 clients. § We are the leading law firm for the energy and infrastructure industry. § BBH is known as „the“ law firm of public utilities, which we really are. But we are far more than that, in Germany and in Europe. § The decentralized utilities, the industry, investors, intermediaries and political bodies, like the European Commission, the Federal Government, the Federal States and public corporations and many more appreciate BBH’s work. § Your success is our success. This is something we are proud of.
  3. 3. 00766-13/2002249Legal Challenges in the Infrastructure Package8 March 2013 Dr. Olaf Däuper, Rechtsanwalt / lawyer § Born in Langen/Hessen in 1973 § Studies of law at the Universities of Mainz, Glasgow (Erasmus scholarship) and Freiburg/Breisgau § 1998 to 1999 member of the academic staff at Max Planck Institute for Foreign and International Criminal Law (US- Department) § 1998 to 2000 legal state traineeship in Freiburg, Offenburg and Brussels § Since 2001 associate at BBH Berlin § Doctorate at Humboldt University in Berlin on an Energy antitrust law topic in 2003 § Since 2006 admission as lawyer at the Superior Court of Justice § Since 2007 partner of BBH Berlin § Memberships: German-American Lawyer’s Association (GALA), Institut für Energie- und Wettbewerbsrecht in der kommunalen Wirtschaft e.V. (EWeRK), Gesellschaft für Energiewissenschaft und Energiepolitik e.V. (GEE) § Comprehensive lecturing and publication activities Dr. Olaf Däuper Rechtsanwalt Partner (since 2007) Contact: olaf.daeuper@bbh-online.de Tel.: 030/611 28 40-15
  4. 4. 00766-13/2002249 Content I. Objectives II. As Things Are Now III. The Infrastructure Package (IP) IV. Priority Corridors and Areas and Projects of Common Interest (PCI) V. Connecting Europe Facility (CEF) VI. Challenges for Administrative Law VII. Conclusion Legal Challenges in the Infrastructure Package8 March 2013
  5. 5. 00766-13/2002249 Objectives of the Infrastructure Package § Achievement of the internal energy market § Better integration of markets and no isolation of any Member State from European energy network (solidarity) § Economic § Modernisation of trans-European energy infrastructure (transmission systems) § Fostering economic growth and jobs § Diversification à Security of supply § More competition à Lower prices § Ecological § Achievement of energy and climate goals of “20-20-20 by 2020” § Better integration of renewable energy sources § “Decarbonisation” of EU energy system until 2050 (low carbon economy) § In General: better climate protection, sustainability Legal Challenges in the Infrastructure Package8 March 2013 Short-term vision Long-term vision European Infrastructure Package Third Energy Package Energy solidarity Role of gas in the EU energy mix External energy policy Internal gas market
  6. 6. 00766-13/2002249 Documents § Proposal for a Regulation of the European Parliament and of the Council on Guidelines for Trans-European Energy Infrastructure and Repealing Decision No 1364/2006/EC (19 October 2011) § MEMO/11/710 – The Commission‘s Energy Infrastructure Package (19 October 2011) § Proposal for a Regulation establishing the Connecting Europe Facility [COM/2011/665] § Communication - A growth package for integrated European infrastructures [COM/2011/676] Legal Challenges in the Infrastructure Package8 March 2013
  7. 7. 00766-13/2002249 Subject Matter and Scope § Art. 1 – Subject Matter and Scope § The Regulation… § (a) lays down rules to identify projects of common interest necessary to implement these priority corridors and areas and falling under the energy infrastructure categories in electricity, gas, oil, and carbon dioxide set out in Annex II; [prioritisation] § (b) facilitates the timely implementation of projects of common interest by accelerating permit granting and enhancing public participation; [streamlining of procedures] § (c) provides rules for cross-border allocation of costs and risk-related incentives for projects of common interest; [sharing of costs of cross-border projects] § (d) determines conditions for eligibility of projects of common interest for Union financial assistance under [Regulation of the European Parliament and the Council establishing the Connecting Europe Facility]. [financial support] Legal Challenges in the Infrastructure Package8 March 2013
  8. 8. 00766-13/2002249 As things are now… September 2006 Decision No 1364/2006/EC (TEN-E guidelines) 2010 Launch of Europe 2020 strategy 19 October 2011 Publishing of legislative proposal 2011/0300 (COD) 28 November 2012 Agreement by Parliament and Council on Regulation 8 December 2012 Vote in committee, 1st reading/single reading Current stage Awaiting Parliament 1st reading / single reading / budget 1st stage (European Council concludes to further cap budget of CEF) March/April 2013 Publication and entry into force expected Early 2013 Decision on the budget for Projects of Common Interest 31 July 2013 (latest) Adoption of the Union-wide list of PCI 2014 Entry into force of CEF Legal Challenges in the Infrastructure Package8 March 2013
  9. 9. 00766-13/2002249 Content of the Infrastructure Package The infrastructure package includes five legislative proposals 1-3 transport energy information society ↓ ↓ ↓ sectoral guideline sectoral guideline sectoral guideline 4 Connecting Europe Facility (CEF) transport energy information society ↓ ↓ ↓ EUR 30 billion EUR 23 billion EUR 9.1 billion EUR 5.1 billion EUR 9.2 billion EUR 1 billion 5 Project Bond Proposal § European Energy Infrastructure Package as part of the European Infrastructure Package Legal Challenges in the Infrastructure Package8 March 2013
  10. 10. 00766-13/2002249 Priority Corridors and Areas § Art. 1 I – Subject matter and scope, Annex I: § (1) Priority Electricity Corridors § Northern Seas offshore grid (“NSOG”) § North-South electricity interconnections in Western Europe (“NSI West Electricity”) § North-South electricity interconnections in Central Eastern and South Eastern Europe (“NSI East Electricity”) § Baltic Energy Market Interconnection Plan in electricity (“BEMIP Electricity”) § (2) Priority Gas Corridors § North-South gas interconnections in Western Europe (“NSI West Gas”) § North-South gas interconnections in Central Eastern and South Eastern Europe (“NSI East Gas”) § Southern Gas Corridor (“SGC”) § Baltic Energy Market Interconnection Plan in gas (“BEMIP Gas”) § (3) Priority Oil Corridor (Oil supply connections in Central Eastern Europe, “OSC”) § (4) Priority Thematic Areas Legal Challenges in the Infrastructure Package8 March 2013 (1) electricity (2) gas (3) oil (4) carbon dioxide
  11. 11. 00766-13/2002249 Example – Northern Seas Offshore Grid Legal Challenges in the Infrastructure Package8 March 2013 An integrated offshore electricity grid in the North Sea, the Irish Sea, the English Channel, the Baltic Sea and neighbouring waters to transport electricity from renewable offshore energy sources to centres of consumption and storage. Projects to be considered as potential PCIs (list is not exhaustive) • New interconnection between Denmark and the Netherlands • New sub-sea interconnector between France and the UK • New sub-sea interconnector between the UK and Belgium • Sub-sea interconnector and hub between Germany/UK and Norway • AC land link between Northern and Southern Ireland PriorityElectricityCorridor “NSOG” source: European Commission, Connecting Europe
  12. 12. 00766-13/2002249 Example – Southern Gas Corridor Legal Challenges in the Infrastructure Package8 March 2013 Transmission of gas from the Caspian Basin, Central Asia, the Middle East and Eastern Mediterranean Basin to the Union to enhance diversification of gas suppliers. Projects to be considered as potential PCIs (list is not exhaustive) • Gas transmission infrastructures, including new pipelines across Turkey and/or transmission solutions across the Black Sea, to connect gas producing countries in the Caspian (e.g. Azerbaijan, Turkmenistan) and Middle East (e.g. Iraq) to EU Member States • Gas transmission infrastructures required for connecting EU Member States to gas suppliers in the Eastern Mediterranean and the Middle East PriorityGas Corridor “SGC” source: European Commission, Connecting Europe
  13. 13. 00766-13/2002249 Projects of Common Interest § Projects of Common Interest, Art. 3 – 6 § To implement infrastructure priorities § Process: Identify – Evaluate – Adopt § Art. 3 Union-wide list of projects of common interest § Establishment of twelve Regional Groups, Art. 3 II, Annex III § Adaptation of “regional list” of proposed projects of common interest § Commission à Union-wide list of PCI § Every two years § First list to be adopted by 31 July 2013 Legal Challenges in the Infrastructure Package8 March 2013
  14. 14. 00766-13/2002249 Projects of Common Interest § Art. 4 – Criteria for projects of common interest § (a) Necessity for implementation of at least one of the priority corridors and areas mentioned § (b) Economic, social, and environmental viability (Potential overall benefits outweigh its costs) § (c) Involvement of at least two Member States § by directly crossing the border of two or more Member States; or § Location on territory if one Member State and significant cross-border impact; or § Crossing of border of at least one Member State and an EEA country § Further specific criteria in Art. 4 § In general: essential contribution to integration of internal energy market § Art. 5 – Implementation and monitoring § Art. 6 – European coordinators Legal Challenges in the Infrastructure Package8 March 2013
  15. 15. 00766-13/2002249 Connecting Europe Facility § Part of the Multiannual Financial Framework of the European Commission (MFF) § Proposal for a Regulation of the European Parliament and of the Council establishing the Connecting Europe Facility COM(2011) 665, 2011/0302 (COD); 19 October 2011 § More effectiveness § A single framework for investing into EU infrastructure priorities à so far funding fragmented among many programmes § Maximise synergies and interaction between the energy, transport and ICT programmes § Simplification of rules § Centralisation § Common award criteria, conditions for financial assistance, and funding instruments § More certainty § Financial crisis led to budget cuts à infrastructure investments needed § Certainty à attraction of more private sector financing Legal Challenges in the Infrastructure Package8 March 2013
  16. 16. 00766-13/2002249 Challenges § Challenges for Administrative Law – Chapter III, IV, V § Implementation of Chapter III of the Regulation, Art. (7)8 – 11. § (Art. 7 – Regime of common interest) § Art. 8 – ‘Priority status’ of projects of common interest § Art. 9 – Organisation of the permit granting process § Art. 10 – Transparency and public participation § Art. 11 – Duration and implementation of the permit granting process Legal Challenges in the Infrastructure Package8 March 2013 Proposals for Regulation Chapter I II III IV V VI General Provisions Projects of Common Interest Permit Granting and Public Participation Regulatory Treatment Financing Final Provisions
  17. 17. 00766-13/2002249 Overview: Challenges for Administrative Law § Specific objectives for administration: ”less complexity – more efficiency” § Introduction of a binding overall time limit of three (and a half) years for permit-granting § Concentration of permit-granting powers or coordination in one single authority (one-stop-shop) § Streamlining of environmental authorisation procedures § More transparency to enhance public acceptance § Reduction of costs by 30% for project and 45% for administrative authorities § Promotion of cooperation between Member States Legal Challenges in the Infrastructure Package8 March 2013
  18. 18. 00766-13/2002249 Efficient Permit Granting § PCI shall be allocated the status of highest national significance possible (Art. 8 I) § Establishment of public interest and necessity of PCI (Art. 8 II) § Streamlining of environmental assessment procedures (Art. 8 IV) § Designation of one national competent authority (Art. 9 I) which can decide according to… § (a) The integrated scheme § (b) The coordinated scheme § ((c) The collaborative scheme) § Cooperation of authorities if decisions required in two or more Member States (Art. 9 III) § Transparency and public participation, Art. 10 § Permit granting process consisting of two phases (Art. 11) § The pre-application procedure (2 years max.) § The statutory permit granting procedure (1 year (and 6 months) max.) Legal Challenges in the Infrastructure Package8 March 2013
  19. 19. 00766-13/2002249 Cost-benefit anaylsis, allocation, incentives § Problem: national regimes of regulation not designed for cross-border infrastructure projects à allocation of costs via cost-benefit analysis § ENTSO-E and ENTSO-G, ACER and Commission to develop methodologies for a harmonised energy system-wide cost-benefit analysis for PCI of gas and electricity, Art. 12, Annex V § Art. 13 I: Incurred investment costs related to a PCI of electricity or gas shall… § be borne by the relevant TSO(s) to which project provides a net positive impact § be paid for by network users through tariffs for network access § National regulatory authorities shall take a joint decision on the allocation of investment costs across border to be borne by each system operator for the respective project, as well as their inclusion in network tariffs. Economic, social and environmental costs and benefits of the project(s) and the possible need for financial support shall be taken into account, Art. 13 V. § For PCI of “higher risks” national regulatory authorities shall ensure that “appropriate incentives” are granted, Art. 14 Legal Challenges in the Infrastructure Package8 March 2013 Proposals for Regulation Chapter I II III IV V VI General Provisions Projects of Common Interest Permit Granting and Public Participation Regulatory Treatment Financing Final Provisions
  20. 20. 00766-13/2002249 Union financial assistance § Eligibility criteria (in guidelines, Art. 15) § Certain PCI of the electricity, gas, and carbon dioxide sector are eligible for Union financial support in the form of: § In exceptional cases: for PCI if… § CBA shows positive externalities § lack of commercial viability § Cross-border cost-allocation decision done Legal Challenges in the Infrastructure Package8 March 2013 Grants for studies Financial instruments according to CEF Grants for works according to CEF Proposals for Regulation Chapter I II III IV V VI General Provisions Projects of Common Interest Permit Granting and Public Participation Regulatory Treatment Financing Final Provisions
  21. 21. 00766-13/2002249 Conclusion § Conclusion § Further development of cross-border infrastructure essential for realisation of internal energy market § Essential for distribution of renewable energy § Streamlining of permit granting and administrative processes to be implemented carefully and timely § Cuts of budget as concluded by Council may be too drastic § Problem: Regulation might violate Art. 171 I TFEU Legal Challenges in the Infrastructure Package8 March 2013
  22. 22. Vielen Dank für Ihre Aufmerksamkeit. BBH Berlin Magazinstraße 15-16 10179 Berlin Tel.: 030 611 28 40 0 Fax: 030 611 28 40 99 berlin@bbh-online.de BBH Köln KAP am Südkai Agrippinawerft 30 50678 Köln Tel.: 0221 6 50 25 0 Fax: 0221 6 50 25 299 koeln@bbh-online.de BBH Stuttgart Industriestraße 3 70565 Stuttgart Tel.: 0711 722 47 0 Fax: 0711 722 47 499 stuttgart@bbh-online.de BBH München Pfeuferstraße 7 81373 München Tel.: 089 23 11 64 0 Fax: 089 23 11 64 570 muenchen@bbh-online.de BBH Brüssel Avenue Marnix 28 1000 Brüssel/Belgien Tel.: +32 2 204 44 00 Fax.: +32 2 204 44 99 bruessel@bbh-online.be www.bbh-online.de www.DerEnergieblog.de BBH Hamburg Kaiser-Wilhelm-Str. 93 20355 Hamburg Tel.: 040 341 069 0 Fax: 040 341 069 22 hamburg@bbh-online.de Contact: Dr. Olaf Däuper Thank you for your attention.

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