Stabilization Mechanisms for Nuclear Investments v. Electricity Market Liberalization: The Case of Contract for Difference: Lessons from the United Kingdom and Romania

TY - JOUR

T1 - Stabilization Mechanisms for Nuclear Investments v. Electricity Market Liberalization: The Case of Contract for Difference

T2 - Lessons from the United Kingdom and Romania

AU - Stanescu, Catalin Gabriel

PY - 2018

Y1 - 2018

N2 - The article addresses Contracts for Difference (CfD) as state aid and price stabilization mechanisms needed to mitigate the risks stemming from the incompatibility of liberalized electricity markets and nuclear energy investments. It starts by defining CfD mechanism as state aid required to support nuclear investments. It continues by analyzing the issue of state aid in relation to the nuclear sector, with focus on the ``market failure'' argument as it transpires from both the European Commission's assessment of the state aid scheme and the decision of the Grand Chamber of the Court of Justice of the European Union. Attention is dedicated to the uses of the same support scheme in two similar nuclear projects in Hinkley Point (United Kingdom) and Cernavoda (Romania). The article concludes that given the systemic differences between the two national energy markets, CfD might not be a suitable solution for both national energy markets.

AB - The article addresses Contracts for Difference (CfD) as state aid and price stabilization mechanisms needed to mitigate the risks stemming from the incompatibility of liberalized electricity markets and nuclear energy investments. It starts by defining CfD mechanism as state aid required to support nuclear investments. It continues by analyzing the issue of state aid in relation to the nuclear sector, with focus on the ``market failure'' argument as it transpires from both the European Commission's assessment of the state aid scheme and the decision of the Grand Chamber of the Court of Justice of the European Union. Attention is dedicated to the uses of the same support scheme in two similar nuclear projects in Hinkley Point (United Kingdom) and Cernavoda (Romania). The article concludes that given the systemic differences between the two national energy markets, CfD might not be a suitable solution for both national energy markets.

KW - Faculty of Law

KW - Energy

KW - nuclear energy

KW - state aid

KW - market liberalization

KW - Hinkley Point

KW - Cernavoda

KW - market failure

M3 - Journal article

SN - 1879-3886

VL - 27

SP - 223

EP - 235

JO - European Energy and Environmental Law Review

JF - European Energy and Environmental Law Review

IS - 6

ER -