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Beyond Formal Competence: ACER's Unexpected Autonomy and the Paradox of Regional Disunity Driving EU Energy Integration

European Politics
Integration
Political Economy
Regulation
Energy
Hermann Anton Lüken genannt Klaßen
Georg-August-Universität Göttingen
Hermann Anton Lüken genannt Klaßen
Georg-August-Universität Göttingen

Abstract

National discretion and regulators have historically dominated the European Union's energy market integration. However, the Agency for the Cooperation of Energy Regulators (ACER) has demonstrated unexpected autonomy since 2015 with the drafting of network codes, extending beyond its formal competencies, enabling significant harmonization in sensitive areas of national energy policy. This paper examines ACER's surprising independence from system operators and national regulators. This article argues that ACER's recent decisions diverge significantly from stakeholder expectations, leading to unprecedented legal actions from regulatees against ACER. Given their high costs and complex procedures, these challenges are smoking gun evidence of ACER's de-facto independence. This autonomy is particularly puzzling given ACER's structure, which includes a decision-making committee dominated by national regulators, leading many to view it as a mere forum rather than an autonomous actor The article analyzes two critical cases: First, the implementation of the fast-activation process, where system operators face potential billion-euro liabilities for prioritizing national system security over cross-border trade - marking the first instance of financial accountability for failing to prioritize market efficiency. Second, the mandatory capacity sharing with neighboring countries for system security represents a crucial shift toward European-level security management. The article leverages a natural experiment comparing two regional energy regions with similar functional stakes. In different regions, system operators submitted comparable drafts, while in one region, the agreement was reached through national regulators, and in the other, it required the intervention of ACER. The subsequent difference in outcome highlights ACER's role in promoting transparency and establishing stringent rules for system operators, in contrast to national regulators' tendency to maintain domestic prerogatives. Through process tracing and comparative analysis of non-papers, draft documents, court proceedings, and public statements, we demonstrate that ACER's autonomy emerges from the network code rulemaking structure. Two key factors enabled ACER to assert its perspective as a European regulator: national regulators' inability to amend the ACER president's draft and pressure from the European Commission to meet strict deadlines. Counterintuitively, our findings suggest that regions with more veto players and higher conflict potential may achieve greater integration under appropriate institutional frameworks. This occurs because fragmented regions are more likely to delegate decision-making to ACER, which implements more integrative solutions. This insight challenges conventional assumptions about the relationship between regional cohesion and integration progress, which is particularly relevant given the recent Clean Energy Package amendment rules. This research advances the understanding of how integrated energy networks can emerge despite national resistance, even in sensitive areas like system security. It illuminates how institutional design can enable supranational agencies to transcend national interests and established rules, contributing to broader discussions on European integration and regulatory governance.