Department of Law

The Existing Regulatory Conditions for 'Energy Smart Water Utilities': Promotion of Sustainable Energy Transition

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This chapter is focused on the legal conditions that exist for the energy–smart water utilities in the European Union (EU). In section 2 the interdependencies of water and energy services and the growing interest in solving these problems that may arise from this interdependence by regulatory initiatives are shortly described. One of the solutions needed is a reduction of energy use in the water utilities by their utilisation of renewable sources – acting as energy–smart water utilities. Such utilities are described in section 3. The policy and law regulating the water utilities are important conditions. Based on these facts, the resource efficiency and low–carbon policy of the EU as well as the EU’s rules of relevance for the utilities are highlighted in section 4. It is concluded that the current EU legislation makes it possible for the Member States to promote energy–smart water utilities. As the competences related to energy–smart water utilities are shared between the EU and its Member States, and as the relevant EU legislation is of a minimum harmonising nature, the Member States have an important role to play in the design of the legal conditions for the utilities in the EU. The importance of the national regulatory design and the problems related to legal barriers are illustrated in section 5 with examples from Danish legislation. The Danish regulatory style is more inflexible than necessary. The benchmarking model and price-cap systems – established as mandatory legal conditions together with the ‘full-cost-recovery principle’ – are discouraging investments in new energy-related technologies. There are also restrictions on the water utilities production of renewable energy – including rules on mandatory ownership unbundling. In section 6 of this chapter there is a short conclusion on the current legal design and the problems that it causes for the water utilities that want to be resource–efficient and have a low–carbon footprint.
Original languageEnglish
Title of host publicationSustainable Energy United in Diversity : Challenges and Approaches in Energy Transition in the EU
EditorsLorenzo Squintani, Hans Vedder
Number of pages25
Place of publicationLeiden
PublisherEuropean Environmental Law Forum
Publication year2014
Pages111-136
Chapter6
ISBN (Electronic)978-90-367-7569-4
Publication statusPublished - 2014
SeriesEuropean Environmental Law Forum Book Series
Volume1

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