The Liberalisation of the Internal Energy Market: Is the EU Dancing at a British Tempo?

The first stage spans across the 1970s and early 1980s in the context of a global oil crisis, instability of international energy markets and an embryonic participation of the Community in the energy issues (provided the peculiarity of the Euratom framework and the slow exhaustion of the European Coal and Steel Community). Despite pressing concerns about the security of energy supply in the Community, Britain adopted a rigid position to defend national sovereign control over its North Sea oil and gas reserves. With a de facto veto power, the United Kingdom limited the room for manoeuvre of the Commission and watered down the emerging narrative on a Community-wide crisis response and energy policy development. The British insistence on agenda exclusion curbed the potential of the Commission’s entrepreneurship as well as the acknowledgment of rational energy consumption and stronger internal energy integration and trade as key opportunities to address security-of-supply issues.

The evolution of the international and European energy context triggered a significant change in the British position on the negotiation of a Community energy policy. This second stage—spanning across the second half of the 1980s and the early 1990s—saw the UK act as a first–mover in the liberalisation of the EU energy market. This radical change in the British perception of EU energy policy and the market opportunities connected to it instilled new momentum to the liberalisation agenda and rewarded the Commission’s entrepreneurship on this subject. Theoretically, the analysis of this agenda-setting phase in the construction of the energy market contests the long-standing assumption that policy entrepreneurship alone generally allows an actor to successfully set the agenda in a way that is resonant with its own interests. The impact of the British U-turn on energy liberalisation shows that, in spite of exceptionally good or proactive entrepreneurship, the institutional constraints and rules of a rigid policy-making environment such as the EU require national consensus and intergovernmental momentum to significantly affect agenda-setting processes.

Finally, the third stage spans across the late 1990s and mid-2000s and sees the emergence of the sustainability and climate-change priorities in EU energy policy narratives. By tactically controlling this process, Britain responded to the growing relevance of EU environmental policy strategies and the possibility that the Commission developed a regulatory approach trespassing into heavier supranational competences. Britain’s defensive approach avoided greater adaptation costs by uploading the domestic modus operandi on environmental policy and structuring the agenda around this core issue. It did so by harnessing the tools and opportunities of the Council Presidency in two different occasions: in 1998, investing on the institutionalisation of the a ‘greener’ energy policy by building consensus around the Cardiff process; in 2005, by uploading to the EU level the low-carbon objectives and market-oriented solutions to climate-change challenges using this new paradigm as a lever to initiate the restructuration of the internal energy market. The traditional discursive policy entrepreneur, the Commission abided by the agenda-setting power of the United Kingdom but at the same time, maximised its policy returns insofar as it used British interests to promote its own agenda.

Ultimately, this chapter has shed light on the agenda-shaping process that led to a more liberalised and sustainable EU internal energy market. The process has been dominated by the interplay between two key actors, the United Kingdom and the Commission: an agenda shaper that made full use of the powerful toolkit (acquiescence, veto, and entrepreneurship) at its disposal vis-à-vis a policy entrepreneur with unchallenged discursive resources and visibility and frustrated agenda-setting abilities curbed by legislative and institutional constraints.

For EU energy policy to play the Commission’s tune, it has to go at a British tempo. The governance structure of the EU does not exclude other actors from taking action in this direction in the future (see also Cox and Dekanozishvili in Chap. 9). The ongoing challenge in shaping the agenda and the debate on the creation of a common electricity market for renewable energy illustrates the complex interplay between the Commission and involved member states (see Jacobs in Chap. 6). One of the conclusions that can be drawn is that the narrative and discursive changes which affected EU energy policy throughout the last 40 years can be either catalysed or hindered by a number of events, decisions and political dynamics. These are ultimately hardly predictable and depend on institutional and political constraints from the local, national and European levels. In other words, the current narrative of a sustainability-driven energy policy in Europe is the result of combined interest pulls and pressures that defended Britain’s national preferences and the Commission’s ambition to affect EU policy-making in as many fields as possible. The establishment of this narrative is a sort of historical precedent that may serve as a blueprint for discursive policy action by other actors in different contexts or policy fields—be they other interested and sufficiently power Member States or other European institutions, such as the European Parliament.

In institutionalist terms, the British tempo that has let energy policy evolve since the 1970s is a political constraint that all actors will have to take into consideration. The goals, the regulatory instruments and the market-driven vision uploaded from the United Kingdom to the EU have become the current paradigm for energy policy-making in the EU and it has already adapted to the fledgling and comprehensive vision of sustainability and climate-change action. In order to affect this path-dependent balance and swerve EU energy policy towards another set of shared interests and common goals, the construction of a new consensus will likely require significant political and discursive investments in a rapidlychanging global context and with a sensitive impact on the daily lives of EU citizens.