The energy sector has long-remained at the heart of world market economies, where it has consistently exhibited crucial strategic and economic importance. Sufficient and effective management of the energy sector is also pivotal in the development of human society, assisting us to adapt to environmental changes, whilst also controlling such changes. Within the energy sector, many tangible resources are controlled and produced, including oil, gas, electricity, coal and more recently renewable sources such as wind, hydroelectric and solar power.
It is worth providing the reader with a precise definition of experimentalist governance, so we can familiarise ourselves with what it concerns and establishes through its implementation. Here, Jonathon Zeitlin and Charles Sabel define experimentalist governance as involving “four key elements, which include the establishment of framework goals and metrics; elaboration of plans by “lower- level” units for achieving them; reporting, monitoring, and peer review of results; and recursive revision of goals, metrics, and procedures in light of implementation experiences. The most crucial feature of experimentalist governance is its recursive character” .
Before going on to evaluating experimentalist governance regarding the energy sector, it is worth mentioning that through efforts to balance power between regional and central governments on a transnational level, the European Union has benefitted from the use of multi-level governance. Political scientists Liesbet Hooghe and Gary Marks developed multi-level governance in the early 1990s. The theory “illuminates the intimate entanglement between the domestic and international levels of authority” , which can certainly be seen in practice in the energy sector. In the energy sector, challenges presented by energy usage and climate change have been tackled, where issues of energy efficiency within various cities have been handed down to local authorities, so that in a sense pressure to meet targets of increased energy efficiencies set by national governments has been eliminated. Such an approach has also provided notions of self-governance, where within a multi-level system, horizontal collaboration allows cities to ‘collaborate with regions demonstrating multi-levels of governance to tackle urban climate change’ . All together, this allows cities to respond to unique changes and problems within their own jurisdictions, where previously national governance would often miss out or fail to identify these. One particular example that has developed through multi-level governance includes the Cities for Climate Protection (CCP) program. Here, responsibilities of the energy sector relating to climate change are identified and shared between different levels of governance, from both non-state and state actors. Through implementation of this program, it has been said it has taken a ‘leading role in reducing greenhouse gas (GHG) emissions… through strategies and actions addressing sustainable energy (reducing consumption, energy efficiency, renewable energy), urban design / land use planning, sustainable mobility (public transport, clean fuels, reducing congestion, non- motorised mobility), as well as water and waste management’ .
Aside from multi-level governance providing a basis for the ways governance has been deciphered in the energy sector, when examining modes of experimentalist governance, I was originally unaware that experimentalist governance would reach to wider fields including the energy sector and environmental protection. Yet, contrary to my misconception, Jonathon Zeitlin establishes that ‘experimentalist governance in the EU is not confined to policy fields where the Union has weak competences and produces mainly non-binding guidelines, action plans, scoreboards, and recommendations’ . In suggesting this, Zeitlin further adds that ‘experimentalist architecture of framework rule making and revision is also well-developed in domains where the EU has extensive legislative powers’ (including the energy sector). In this essay, experimentalist governance within the energy sector will be evaluated through changes in regulatory frameworks, policy solutions and examining the coordination of such practises.
In the field of the energy sector, much like multi-level governance, experimentalist techniques are concerned with decentralised activities of ‘lower level’ units, of which are co-ordinated on a transnational EU level. Here, you could suggest that experimentalist governance assists complex issues, which traditional governance was incapable of doing so. This holds true, as the energy sector is a highly politicised and strategically uncertain field, which interrupts solutions as political barriers made conversations too broad and complex. Relating this issue back to discussions by Sabel and Zeitlin, you could refer to the energy sector as consisting of a “multi-polar or polyarchic distribution of power, in which no single actor has the capacity to impose her own preferred solution” . Additionally, experimentalist governance also allows the introduction of regulatory solutions, which will focus upon lower-level units regardless of power being highly centralised.
During a study upon regulation in the energy sector, it has been said that between 1973 and 1982, ‘regulation of the energy sector tends to be less formal than regulation of the workplace’ . Hereby, the energy sector benefitted from a mode of experimentalist governance, where Responsive Regulation was seen as a ‘landmark’, which also welcomed new ways of viewing regulation . Responsive regulation, however, focused upon the domestic setting, yet, now ‘the locus of many regulatory problems has shifted decisively’ to the transnational realm. Hereby, to incorporate the collective development of regulatory rules, both the Electricity Regulation Forum (Florence Process) and the Gas Regulatory Forum (Madrid Process) featured modes of experimentalist governance in order to tackle this issue.
The energy sector benefitted from developing and orchestrating a step-by-step plan within these talks, which ‘included a European cross-border tarification system that would allow important progress towards achieving the framework goal of an interconnected grid system for commercial transactions’ . Such a plan echoes key sentiments of experimentalist governance as this corresponds with framework rule making across varying contexts. In doing so, the tariff system also provided harmonisation between European states, where regardless of your situation or country, the European grid would feature, a universal flat rate.
Secondly, the forum also drew from experimentalist governance, in the sense that reviewing and monitoring was at the heart of measuring cross-border tarification. It was from these deliberations that the idea of congestion management in electricity networks was developed. Here, The European Union’s regulation 1228/2003 outlined guidelines for how congestion should be managed in Europe . Such practises have benefitted the energy sector, regarding electricity markets as demand and supply has now been balanced, yet, on the contrary transmission constraints have had a large influence on market price. Thirdly, the Forum has also been the source of significant recursive revisions of policy objectives and procedures .
Here, the most important outcome of such revisions, has allowed The European Regulators Group (ERGEG) to develop “Electricity and Gas Regional Initiatives” . Here, through codifying 7 electricity and 3 gas regional markets in relation to a single-EU energy market, it has been said that this has promoted “real and practical improvements in the operation of the EU gas and electricity markets” . The initiatives have also been commandeered as providing a ‘stepping-stone towards the completion of the Internal Energy Market’ .
Upon reporting on the benefits acquired by these initiatives, ERGEG Chair, Sir John Mogg, underlined that “The Regional Initiatives are already laying the foundation for a single market by removing barriers to competition. Given the regional cooperation approach inherent in the third package, the Regional Initiatives and new EU Agency will play a key role in integrating Europe’s energy market” . In the electrical regional initiatives, one outstanding initiative, increased co-operation through France, UK and Ireland, where a single Electricity Market was developed, alongside the implementation of a cross-border balancing scheme. These particular roles formed through experimentalist governance in the energy sector have provided harmonisation between previously competing countries, whilst providing greater transparency and market coupling. Most importantly, market coupling has now been successfully extended to the borders of Northern Italy. In doing so, European price coupling ‘now covers 85 % of Europe’s electricity demand and extensions to the borders of Austria and Croatia with Slovenia are under consideration for 2016’ . In relation to gas regional initiatives, these have helped speed up the integration of Europe’s national gas markets. Yet, ‘The 27th Madrid Forum (October 2015) concluded that despite the positivity of integration, ‘the future role of the GRI needs to focus on more specific deliverables as stepping stones towards the completion of the Internal Energy Market’ .
Aside from these strides made in the energy sector regarding regulation and the development of new frameworks, metrics and initiatives, the energy sector has experienced difficulties concerning its scope and implementation. Most, if not all of the experimentalist techniques that have been facilitated within the energy sector have all been limited to building a single grid for market integration. Whilst, this is beneficial regarding ‘major efficiency gains in welfare terms to European consumers and industries’ , this leaves behind the fact that energy governance is shaped ‘by decentralized decisions on the mix of primary energy sources for generation, or by national policies towards utility restructuring, for which there are no equivalent coordination processes in place’ .
To conclude, the energy sector has certainly experienced an increase in harmonisation between countries and the private and public sector. Additionally, many regulation solutions have been deciphered which has also increased harmonisation and conversation between the public and private sphere. This is majorly seen in the cross-border tarification system that has been discussed, as this has ‘essentially codified the substantive principles that the Forum had developed with regard to tarification and capacity allocation, and that now form the basis of grid interconnection policies in Europe’ . Yet, despite such positive changes, the energy sector is still often seen as “one of the weakest policy areas”, where EU-wide targets concerning increasing energy efficiency by 20%, have failed as these initiatives remain non-binding. Furthermore, as the Lisbon treaty preserves the notion of ‘energy sovereignty’, which allows each state to choose its energy source, many targets of moving towards renewable sources and limiting the disadvantages of the overuse of energy still remain key issues in today’s world. Hereby, despite the EU-wide conversation generated by experimentalist forms of governance, the EU still has a long way to go in establishing that all EU members universally adhere to climate and energy targets which are fundamental in the future of society.