Implementation of EU Energy Packages – harmonisation or path-dependent trajectories? A comparison of Germany and the Netherlands

Since the 1990s, the EU has attempted to create a common electricity market, however, with limited success. We argue that this can be explained by the differentiated implementation of directives over time. Using a path dependence approach, we argue that the actor constellation at the beginning of the European harmonization efforts matters, as they allow stakeholders to develop different degree of institutional power. A country´s actor constellation determines how well that country implements the directive. The implementation, in turn, changes the actor constellation for the next directive. We illustrate our argument analysing the implementation of the first three energy market packages in Germany and the Netherlands. Both countries had similar electricity markets at the beginning of electricity liberalisation, but their actor constellation was slightly different. German implementation gradually strengthened the vertically integrated utilities, while Dutch implementation dismantled these utilities through unbundling. Overall, we show how differentiated implementation over time can counteract European harmonization.