Political Frame Conditions for Energy Policy Lutz Mez - - PowerPoint PPT Presentation

“Energy Policy Research in the Caspian Region - State of the Art and Perspectives”

October 11-12, 2005, Khazar University, Baku, Azerbaijan

Lutz Mez

Environmental Policy Research Centre Freie Universität Berlin

Political Frame Conditions for Energy Policy

Outline

• Energy Policy Arenas
• International Energy Policy
• Energy Policy – Policy Styles
• Energy / Environmental Policy
• Emergence and characteristics of ESI
• State Intervention & Regulation of ESI

Energy Policy Arenas

• Fossil fuels
• Nuclear energy and the environment
• Renewable energy sources
• Energy efficiency
• Electricity (and gas) deregulation and

the environment

• Converging or diverging approaches to

meet energy/environmental challenges?

International Energy Policy

• Comparison and contrast of the roles played by

EU/Germany, Japan, and the U.S. in developing countries - energy needs and pollution problems

• Germany/the EU plays a central role in Central

Europe and Russia

• Japan plays a central role in China and Asia
• U.S. has strong interest in policy developments in

Central and Latin America as well as playing a strong global role

International Energy Policy

• Financing instruments („traditional“,

unilateral, and newly founded like GEF)

• Role within various international
• rganizations and regimes
• Common challenges in addressing

energy/ environmental issues in developing countries, similarities and differences in responses

Traditional vs. modern Energy Policy

traditional

• supply-side oriented
• few actors
• fossil or nuclear energy

sources

• promotion and/or

substitution of one energy source modern

• demand-side oriented
• large number of actors
• sustainable energy

sources

• useful energy
• new instruments
• new institutions

Energy Policy - Policy Styles

• Institutionalized and non-institutionalized

approaches taken to political problems

• Process of policy formulation and design of

programs (open vs. closed, authoritative- hierarchical vs. discourse-driven etc.)

• Differences in policy design and successes

and failures of energy programs

Energy Policy –

Framing of Policies and Programs

• What is the social-economic, political-

ideological context of the policies?

• What environmental and political

discourse shapes public and political attitudes?

• Identify underlying patterns of political

reasoning and public „justification“ or rationale for policy programs

Energy & Environmental Policy - New Directions

• Successful environmental policies are

interrelated to choices in energy policy

• Traditional energy policy-making does not

take this into account and contradicts environmental targets

• Can instances or elements be identified with

respect to an „inter-policy“ exchange between energy and environmental policy?

• How is the inter-face reflected in institutional

and procedural structures and innovations?

Emergence of ESI

• ESI emerged in the 1880s
• Electricity as artificial form of energy
• Edison‘s vision
• Electro-technical industry’s strategy
• Lenin „Electrification & Soviet power“
• Nuclear age

Industrial and social

• rganisation of ESI
• State in the State
• Lenin‘s illusion
• The Energy Syndrome
• State failure, economy failure, social

failure, system failure

• The Nuclear State
• The Solar Age

Technology

• Thermal power stations with generators
• Gas turbines
• Fossil and nuclear fuels
• CHP
• Hydro power
• Wind turbines
• Photovoltaic cells
• Fuel cells

Economies of Scale & Efficiency

• Efficiency law
• Enlarging power stations reduces the

price of electricity

• Aircraft turbines as stationary gas

turbine power stations

• CHP
• Alternative technologies

Environmental impact

• Limited resources (fossil fuels, uranium

etc.)

• Ecological problems create pressure
• Objective & subjective problems
• RES-E impacts

State intervention & Regulation

• Ownership (different levels)
• State control (investment, tariffs etc.)
• Regulation & regulatory bodies
• Soft regulation (e.g. voluntary

agreements)

• No need for regulated open access?

Core regulatory functions

Economic (1st order) regulation Political (2nd order) regulation Creation and maintenance of a competitive market

=> Competition regulation

Enforcement of public service

• bligations and implementation of

public policies

=> Public service regulation

Supervision and regulation of natural monopoly elements and production processes

=> Sectoral regulation

Management of public investments and public ownership

=> Public ownership regulation

Market Stage Transition Period to Competition Fully Developed Wholesale and Retail Competition Generation no need (if the stranded investment issue is solved) no need Transmission / System Services strong need (prices/revenues; quality

• f service; security of

supply) strong need (prices/revenues; quality

• f service; security of

supply) Wholesale Market no need no need Distribution strong need (prices/revenues; quality

• f service; security of

supply) strong need (prices/revenues; quality

• f service; security of

supply) Supply Market (Delivering, Metering, Billing etc.) still need (prices/revenues; quality of service) low need (quality of service)

The need for economic regulation of ESI for the different market stages and different stages of competition

Natural monopolies

Frame Conditions for ESI

Regulative Frame

Stabile Monopoly

Forced competition

Structured Competition & Cooperation Organised Marked Forced Marked Stabile Marked

Economic Frame Stage of Activity

Energy Supplyer

Energy Demand Manager

Technology Innovator Regional Catalyst

Actors and process of a regulation framework

C itiz en s P u b lic S erv ic e s fo r U s ers G o o d s a n d s erv ic es fo r C u sto m e rs S ta te-o w n e d E n terp ris e s P riv a te C o m p a n ies S ec to ra l re g u la to r P o litic a l a u th o rities C o u rts a n d n o n ju d ic ia l settle m en t in stitu tio n s

(1 ) s e t u p th e o b je ctiv e s a n d th e ru le s o f re g u la tio n (2 ) e x e rc ize p o litic a l su p e r v isio n th ro u g h o w n e rsh ip (4 ) a r e d ire c t c o m p e tito rs (5 ) p ro d u c e a n d c o m m e rc ia lize (6 ) se ttle d isp u te s

C o m p etitio n re g u la to r

(3 ) im p le m e n t th e ru le s a n d o b je c tiv e s

• f re g u la tio n

Thank you for your attention!

PD Dr. Lutz Mez

Environmental Policy Research Centre umwelt1@zedat.fu-berlin.de http://www.fu-berlin.de/ffu/