Marginalizing independent regulatory agencies? The regulatory governance of renewable energy auctions in Europe

Independent regulatory agencies (IRAs) have emerged and widely diffused across sectors and countries in the 1990s and 2000s as a key institutional component of liberalization policies. Whereas IRAs are meant to operate independently from executives, several de-delegation attempts were reported over the last decade, whereby governments attempted to reduce IRAs’ independence and competences. We argue that another critical mechanism leading to the reduction of IRAs’ power is to create new policy instruments and exclude them – or leave them a marginal role – in their governance. To investigate the relevance of this argument, this paper analyses the regulatory governance of renewable energy auctions, the most important policy instrument for promoting renewable energy. While IRAs emerged as the central actor of electricity market regulation, they are not necessarily so influential in the regulatory governance of auctions. A case in point is the United Kingdom, where the auction regime leaves Ofgem, the electricity regulator, largely marginalized to the benefit of new state-owned companies and ministerial units. In order to ascertain whether, when and why IRAs have been marginalized (or not), the paper combines an in-depth analysis of the UK’s case with data on the regulatory governance of renewable energy auctions in a few other European countries.