In search of an EU energy policy for Mediterranean renewables exchange : EU-wide system vs. ‘corridor by corridor’ approach.
Date: 2013-10-08
Institutions: European University Institute
Subjects: Mediterranean third countries, energy cooperation, energy policy, legislation, renewable energy

ISSN 1977-3919

In Search of an EU Energy Policy 
for Mediterranean Renewables 
Exchange: EU-Wide System 
vs. ‘Corridor by Corridor’ 
Approach1 

Authors: Jean-Michel Glachant and Nicole Ahner

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Highlights

To date there is no clear EU legal and regulatory framework governing 
renewables  exchange  across  the  Mediterranean.  It  is  a  patchwork  of 
Member State, third country and EU energy regulation, complemented 
by  case-sensitive  renewables-specific  trade  arrangements  that  frame 
EU  imports  of  energy  from  renewable  sources  (RES-E)  generated  by 
projects  currently  under  development  in  the  Middle  East  and  North 
Africa region (MENA).

As the vision of a Mediterranean energy market for electricity requires 
extensive investments, institutional and legal reforms and a high level 
of regulatory accord among EU and MENA countries that is not at-
tainable in the near future, we are in practice moving towards a ‘cor-

1.  This policy brief takes advantage of the presentations and comments made at the work-
shop “The ‘Schengenization’ of EU Energy Policy - The Case of Euro-Mediterranean 
Renewables Exchange“, June, 27 2013 organised by the Loyola de Palacio Chair in co-
operation  with  Clingendael  (CIEP),  the  Regional  Centre  for  Energy  Policy  Research 
(REKK) and the Centre for European Policy Studies (CEPS). However it only expresses 
the views of the authors. For a comprehensive study of the existing EU legal framework 
please refer to our Working Paper 2013/xy, of the same name, available at http://fsr.eui.eu.

fsr.eui.eu

Issue 2013/06   
October 2013

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FLORENCESCHOOL OF REGULATIONridor-by-corridor’ approach rather than towards a fully-fledged EU-
style system for Mediterranean RES-E exchanges.

The  various  regional  institutions  and  organisations  involved  in  EU-
MED energy cooperation are crucial for regulatory convergence at the 
regional level, and thus to enable Mediterranean RES-E trade initiatives.

Since  the  Green  Package2  allows  Member  States  to  use  RES-E  from 
non-EU countries for their EU-RES target compliance only if the green 
energy is physically imported into the EU and does not allow for sta-
tistical transfers between the Member States and the third countries, 
it may rather provide an incentive for enhanced North-South energy 
cooperation  than  offer  us  a  ready-to-use  framework  or  platform  for 
RES-E exchanges. However, this may be understood as a rationale for 
regional market integration. 

If the EU were able to institutionalize energy relations with the three 
North African countries or any other country, it would rely on an ex-
tension of the Energy Community, or on a new ‘North African Energy 
Community’.

•

2.  Notably Article 9 of Directive 2009/28/EC on the promotion of the use of energy from 
renewable sources and amending and subsequently repealing Directives 2001/77/EC 
and 2003/30/EC, OJ L 140/16.

Background 

Recent years have seen increasing efforts in Europe 
to win the Southern Mediterranean countries as new 
suppliers of RES-E. Massive amounts of green elec-
tricity generated by projects currently under devel-
opment in the MENA region might be someday con-
sumed in the EU. Estimates suggest that Europe may 
realize  cost  savings  of  30  €/MWH  given  the  lower 
costs  on  the  Southern  bank.  The  MENA  countries 
themselves might expect to benefit from an annual 
export  industry  volume  of  about  €  47  -  63  billion. 
Moreover, a benefit for Member States, and the EU 
as a whole, would be an opportunity to receive credit 
towards the EU RES targets for clean power gener-
ated abroad and consumed in the EU.3

However,  to  date,  beyond  the  stark  invocation  of 
Euro-Mediterranean RES-E exchange less attention 
has  been  given  to  its  actual  implementation. There 
is  no  clear  EU  legal  and  regulatory  framework  for 
energy  cooperation  across  the  Mediterranean.  It  is 
a patchwork of Member States’, third countries’ and 
EU energy regulation, complemented by case-sensi-
tive RES-E- specific trade arrangements that frames 
the envisaged massive EU imports. 

But - What would be the most appropriate platform 
for RES-E exchange across the Mediterranean Basin? 
Should  we  be  moving  towards  a  limited  energy 
exchange  platform  or  towards  unlimited  market 
integration? In other words, should we prefer a ‘cor-
ridor-by-corridor’ approach or rather a full-fledged 
EU-style internal system?

3.  Considering the lack of current development, it is not likely that 
significant  amounts  of  RES  electricity  will  actually  be  imported 
into the EU by 2020; however, because of the long lead time re-
quired to construct an high-voltage, direct current (HVDC) link, 
the  2009/28/EC  Directive  provides  that  Member  States  may  re-
ceive credit for RES consumed in a third country during construc-
tion of an interconnector commenced on or before 31 December 
2016 and under certain limited conditions.

3 ■  EU Energy Policy for Mediterranean Renewables

What is a ‘corridor’ and why is the ‘corridor-by-corri-
dor’ approach more achievable?

In  order  to  accommodate  the  additional  RES-E 
generated  in  MENA  countries,  electricity  trans-
port capacity between the EU and MENA must be 
expanded  on  a  significant  scale.  One  multi-facility 
project, the Mediterranean Solar Plan (MSP), alone 
claims  to  target  20  GW  of  new  generation  capac-
ity.4 Possible solutions for resolving the current low 
infrastructure  connection  between  the  EU  and  the 
MENA include:

1.  “Closing the Mediterranean ring” by means of 

further development of interconnector capacity 
concentrated in the east (Gibraltar) and west (the 
Bosporus), which would permit the transport of 
power across the whole MENA and the EU;

2.  “Corridor approach”, involving the construc-

tion of direct North-South (MENA-EU) direct 
submarine HVDC cables grouped into “trans-
mission corridors” capable of accommodating 
several GW each; or

3.  A combination of 1 and 2.5

A due closing of the ring is still complex today due 
to the poor condition of the grids in several MENA 
countries and the subsequent challenge of effectively 
interconnecting  these  grids.  As  a  first  step,  South-
South  interconnections  need  to  be  enhanced,  both 
in  “hardware”  terms  (infrastructures)  and  “soft-
ware” terms (energy exchanges based on clear cross-
border trading rules and flows integration) in order 
to  develop  mutually  beneficial  commercial  trans-
actions  leading  then  to  a  regional  more  integrated 
platform. The second step, cannot be done before the 
4.  The Mediterranean Solar Plan (MSP) is one of the main efforts set 
forth in the founding declaration of the Union for the Mediterra-
nean (UfM), whose membership includes the EU-27, MENA, the 
League of Arab States and eastern European countries.

5.  MEDRING Update - Volume II, “Analysis and Proposals of Solu-
tions for the Closure of the Ring and North-South Electrical Cor-
ridors” MED-EMIP (Final Draft, April 2010), at p. 88.

Box 1 Necessary trade arrangements

Short-term arrangements

Long-term arrangements

Operational arrangements:
•	 Dispatching
•	 Congestion	management

Commercial arrangements:
Buying	and	selling	power
•	
•	
Inbalances	settlement
•	 Capacity	allocation

Arrangements specific to RES-E
•	 Certification	mechanism
•	

Priority	to	RES-E

Entry	in	generation	(Possible	to	export?)

Connection agreement:
•	
•	 Access	rules	to	the	grids
•	 Access	rules	to	inteconnections

Use-of-system charges:
Transmission	tariffs
•	
Transmission	losses
•	

Relevant for: Area N, Area S, interconnections N-S and any transit area X

Source: A. Henriot, FSR, November 2012.

first,  it  is  South-South  interconnections  to  develop 
a  South-South  market  probably  as  a  pre-requisite 
to  North-South  interconnection  projects.  Many  of 
the  major  markets  in  the  Northern  Mediterranean 
have  a  national  or  regional  power  exchange.  Simi-
larly, some Southern Mediterranean countries might 
go closer to the creation of a sub-regional market, to 
be integrated with the Northern area at a later stage. 
To  successfully  integrate  Northern  and  Southern 
markets,  sub-regional  integration  and  cooperation 
need  to  be  deepened.  However,  today  most  of  the 
Southern electricity systems are still vertically inte-
grated, and / or state-owned monopolies. As a result, 
foreign players or national new comers are discour-
aged to participate in the system. 

Unfortunately the EU side has added its own com-
plexity.  Up  until  2020  there  is  no  real  driver  to 
accelerate the vision of large-scale deployment and 
import  of  green  energy  from  the  South  to  the  EU. 
This may prove useful to meeting new 2030 RES-E 
targets  under  discussion  in  the  EU  (with  RES-E 
being  less  expensive  for  EU  consumers).  Only  on 

4 ■  FSR - Policy Brief ■ Issue 2013/06 ■ October 2013

the horizon 2050, where many national and the EU 
roadmap  look  for  at  least  80%  of  RES  penetration 
(buzz word: the German ‘Energiewende’), the dream 
or the vision of a truly integrated EU-MED energy 
market  could  offer  a  major  role  for  RES  electricity 
imports to Europe. 

Against  such  a  background,  today’s 
‘corridor’ 
approach6 appears more attainable in the near future. 
It might be understood as 

•	 an energy system that includes all necessary 

qualified generation facilities, grid upgrades and 
regulatory modifications;

•	 each corridor is an “interface” between one 

or a few third countries and one or a few EU 
Member States directly involved.

6.  The  three  electricity  ‘corridors’  are  the  ‘Western  corridor’  from 
Morocco  (and  possibly  Algeria)  to  Spain  and  further  to  France, 
Portugal and other EU countries, the ‘Central corridor’ from Tu-
nisia (and possibly Algeria) to Italy and other EU countries and 
finally the ‘Eastern corridor’ from Turkey to Greece and to other 
Member States.

Box 2 Indispensable terms

Actions by the applicable 
MENA government(s) and 
organizations: 

Example of actions by the EU 
Member State government(s) 
exemplified by the Italian case:

Actions by both governmental 
or organizational parties 
to be included in “corridor 
agreement”:

Source: M. Cuomo, FSR, July 2012.

•	

•	

•	

•	

•	

•	

•	

•	

•	

put in place the Grid Code;

authorize production for export and fix criteria for access to the international market; 

define access rules to interconnector capacity and congestion management rules;

identify an independent body certifying renewable sources power plants;

define procedures for tracking production and import of renewable sources (certifi-

cate of origin). 

Italian  case:  define  criteria  for  the  acknowledgement  of  Italian  incentives  to  the 

‘green’ energy from Tunisia (Italy – Tunisia Bilateral Agreement); 

Italian  case:  set  up  procedures  to  monitor  energy  import  aimed  at  achieving  the 

target for RES-E.

capacity allocation and congestion management procedures;

inter-TSO compensation (ITC) mechanisms.

Necessary trade arrangements for Mediterranean 
RES-E exchange

What are the indispensable aspects of the EU legisla-
tive framework for each corridor of RES-E trade?

Any operation of RES-E trade requires at least a min-
imum  set  of  trade  arrangements.  According  to  the 
European Commission today Mediterranean RES-E 
exchanges are still hampered by a lack of common 
qualification  of  generation  facility  and  charging 
principles  for  the  network  use,  a  lack  of  common 
principles  for  priority  access,  a  lack  of  common 
methodologies  for  price  setting,  a  lack  of  common 
provisions  to  establish  a  regional  wheeling  agree-
ment or wholesale energy market, a lack of common 
rules  for  cross-border  electricity  exchanges  such 
as  common  methodology  to  establish  Net  Transfer 
Capacity (NTC), and a lack of transparent capacity 
allocation  and  congestion  management  rules  (at 
least  bilaterally).7  In  fact,  to  take  off  North-South 
RES-E  trade  needs  some  certainty  about  the  trade 
arrangements to be put in place (Box 1).

7.  European Commission, Staff Working Document SWD (2012) – 
164 final accompanying the EC Communication ‘Renewable en-
ergy: a major player in the European energy market, COM(2012) 
271 final at p. 20.

5 ■  EU Energy Policy for Mediterranean Renewables

Indispensable  terms  to  be  included  in  the  inter-
governmental  and  interorganizational  agreements 
controlling  the  development  and  operation  of  the 
corridors are those that reflect the provisions of the 
EU regulatory framework essential to protecting the 
integrity of the EU’s internal energy market, sched-
uled  to  be  complete  by  2014/15.  Box  2  is  a  non-
exclusive list of areas essential for the trade in each 
corridor and thus to be included either in each corri-
dor’s respective intergovernmental and interorgani-
zational agreement or a multilateral agreement.

The role of the regional institutions and organisations, 
industrial initiatives 

A corridor-by-corridor approach may permit a more 
organic  development  of  EU-MENA  energy  trade. 
Much  like  the  development  of  sub-regional  mar-
kets within the EU, corridor-oriented development 
could be guided by the actual needs and appetite of 

voluntary participants from MENA. In this way, each 
regulatory  platform  for  trading  RES  power  between 
the  EU  and  MENA  can  develop  in  synch  with  the 
common  priorities  of  the  participating  countries. 
While this may not be the simplest approach from the 
perspective of global investors and lenders, they might 
(a) have ample opportunity to influence the negotia-
tion of the international agreements controlling the 
applicable corridor and (b) a predictable timeframe 
and procedure for possible changes to the platform 
will be known upon execution of the agreement, i.e. 
the expiration date and modification provisions. 

In addition, building corridors regulated largely by 
contracts negotiated among organizations will allow 
for  an  organic  progression  towards  an  integrated 
EU-Med electricity market. The consecutive (or con-
current) development and operation of several sepa-
rate  corridors  under  regimes  controlled  largely  by 
the parties to each individual “corridor agreement” 
will provide feedback valuable for the eventual later 
codification  in  the  MENA  region  of  those  aspects 
seen as most compatible with EU energy regulatory 
framework.  Similarly,  future  EU  legislation  might 
benefit from the experience of such large-scale inte-
gration with an extra-Community sub-region.

In  this  context  the  key  role  of  the  –  though  vast 
number  of  -  regional  institutions  and  initiatives 
becomes  obvious.  Although  some  coordination  of 
their actions and plans would be desirable, and con-
verging interests should be conveyed in few focused 
Mediterranean associations it is undeniable that these 
bodies are enablers of regional market integration.

To start with the regulatory side, there is MedReg8, 
the institution for Mediterranean Energy Regulators 
launched as a voluntary working group that became 
a formal organisation in 2007. MedReg comprises 23 

energy regulators from 20 Mediterranean countries 
promoted by the EU and mainly worked on a master 
plan  for  building  a  regional  electricity  market,  one 
focus  being  the  establishment  of  strong  and  inde-
pendent regulatory authorities in all Mediterranean 
countries. As a result, for instance, Morocco decided 
to establish an independent regulator for electricity 
and gas in 2014. 

There are the industrial stakeholders, grouped in ini-
tiatives such as the Desertec Industry Initiative (Dii) 
and the MEDGRID industrial initiative,9 which was 
created to support the implementation of the Medi-
terranean  Solar  Plan  (MSP),  and  is  complemen-
tary  to  the  DESERTEC  initiative.  Both  initiatives 
signed a Memorandum of Understanding in 2011 in 
order to cooperate. Similarly, there is the Observa-
toire  Méditerranéen  de  l’Energie  (OME),  a  private 
and  non-profit  association  created  in  1988  assem-
bling  the  major  energy  companies  of  the  Mediter-
ranean  region  which  understands  itself  as  a  gath-
ering  platform  to  promote  regional  dialogue  and 
cooperation.10  Moreover  there  is  a  grouping  of  all 
the  Mediterranean  electricians  associations,  called 
MEDELEC11  or  the  younger  cooperation  initiative 
‘Renewable Energy Solutions for the Mediterranean’ 
(RES4MED)12.

As  a  sister  organisation  to  the  European  Network 
of  Transmission  System  Operators  for  Electricity 
(ENTSO-E),  there  is  the  newly  established  Asso-
ciation  of  the  Mediterranean  Transmission  System 
Operators  (TSOs),  the  so-called  ‚Med-TSO’  that  is 
open to the TSOs of those countries that are parties 

9.  A consortium of 21 companies (TSOs, generators, manufacturers, 
financing institutions, investors) from both shores of the Mediter-
ranean Sea. See http://www.medgrid-psm.com/en/

10.  In May 2013 OME and MEDGRID published their joint report “To-
wards an Interconnected Mediterranean Grid: Institutional Frame-
work & Regulatory Perspectives“, available at: http://www.ome.org. 
11.  For  further  information  visit:  http://www.medelec.org/Content/

8.  For further information visit: http://www.medreg-regulators.org/

Default.asp?

portal/page/portal/MEDREG_HOME 

12.  For further information visit: http://www.res4med.org/site/index. 

6 ■  FSR - Policy Brief ■ Issue 2013/06 ■ October 2013

Box 3 Med Institutions and industrial stakeholders

Source: M. Urbani, OME, ‘Regional Governance for Electricity Integration in the Mediterranean: which Institutional Framework?’14

to  MedReg.13  Equilibrated  governance  is  guaranteed 
by the election of a President from a Southern Medi-
terranean TSO and a Vice-President from a Northern 
Mediterranean  TSO.  Med-TSO  takes  part  in  the 
institutional  settings  related  to  the  development  of 
the  Mediterranean  energy  network,  participates  in 
the operations concerning the network coordination 
of  the  adhering  parties,  and  adopts  of  common  cri-
teria of access and use of the network (network codes, 
transport of energy and tariffs). (Box 3)

Financing institutions – the European Bank for Re-
construction and Development

In correlation with the fast growing energy demand, 
the  International  Energy  Agency  (IEA)  forecasts 
more than US $5 trillion of energy sector investment 

13.  http://setis.ec.europa.eu/newsroom-items-folder/european-com-
missions-launches-med-tso-to-boost-mediterranean-electricity-
systems-2

14.  PowerPoint Presentation from 27th June 2013 available at: http://
fsr.eui.eu/Events/ENERGY/Workshop/2013/130627Schengenizat
ionEUEnergyPolicy.aspx

7 ■  EU Energy Policy for Mediterranean Renewables

in  the  Middle  East  and  Africa  for  2012-2035.  This 
includes investments in national infrastructure and 
potential interconnections. 

The European Bank for Reconstruction and Devel-
opment (EBRD), an AAA-rated international finan-
cial  institution,  owned  by  63  countries  and  two 
inter-governmental institutions promotes transition 
to  market  economies  in  34  countries  from  central 
Europe to Central Asia (including Turkey and Mon-
golia) and from 2012, in the Southern and Eastern 
Mediterranean.  The  capital  base  is  €30  billion:  It 
facilitates inward and cross boarder investments in 
the region. More than €8.9 billion have been invested 
in 2012 across a variety of sectors. The private sector 
accounts for 78% of the EBRD finance. In Autumn 
2012  the  EBRD’s  Board  of  Directors  approved  the 
first three projects in the South & East Mediterranean 
region.  By  2015,  the  EBRD  expects  to  be  investing 
up  to  €2.5  billion  across  the  Southern  and  Eastern 
Mediterranean  region  which  comprises  Jordan, 
Morocco, Egypt and Tunisia. Its mission is inter alia 

                    
Box 4 Conditions to qualify the imported RES-E as “consumed” in the Community following Article 9 of the RES 
Directive at subsection 2(a)(i).

(i) an amount of electricity equal to the RES amount is firmly nominated to the allocated interconnection capacity by all 
responsible TSO’s in:

a.	

b.	

c.	

the	third	country	

the	country	of	destination

(if	applicable)	each	third	country	of	transit	(i.e.	each	‘non-EU	transit	country’)

(ii) this same amount is ‘firmly registered’ in the ‘schedule of balance’ by the responsible TSO on the EU side of the 
interconnector; and

(iii) capacity nomination date and production date refer to the ‘same period’ 

[emphasis	added	by	the	authors]

to support, but not to replace private investment: it 
is  about  additionality  (by  providing  longer  tenors 
matching the projects cash flows, innovative struc-
tures or local currency financing). It can be said that 
it acts as a catalyst for higher and riskier involvement 
of financiers (ability to attract additional sources of 
financing given the EBRD’s market position and to 
provide a wide range of financial tools such as loans, 
bonds, equity, and mezzanine debt).

Article 9 of Directive 2009/28/EC in context

Through 2020, Article 9 of the RES Directive permits 
the Member States to cooperate with third countries 
and  private  operators  in  developing  and  operating 
RES-E  generation  projects  located  in  third  coun-
tries.  RES-E  produced  via  this  “joint  cooperation” 
mechanism will count toward the national targets of 
the Member States provided that the project adheres 
to the requirements of Article 9. To qualify for inclu-
sion in the national target amount, the RES-E must 
be produced in an installation constructed, or refur-
bished, after 25 June 2009 as a joint project and “con-
sumed” in the EU Member State that claims it as part 
of its total consumption.15
15.  RES  Directive,  Article  9,  Subsections  2(a)  and  (b).  In  addition, 
other than investment aid granted to the installation, the RES-E 
amount  must  not  have  benefited  from  the  support  scheme  of  a 
third country.

8 ■  FSR - Policy Brief ■ Issue 2013/06 ■ October 2013

Rather  than  engage  in  the  impossible  task  of  fully 
tracing  the  actual  RES-E  from  generation  to  con-
sumption, the RES Directive uses the following fic-
tion: in order for a specific amount of RES-E gener-
ated in a third country to count towards a national 
target, an amount equal to that specific amount must 
be accounted for at every step of its transport to the 
consumer country, as follows16 (Box 4)

The  requirement  of  an  actual  physical  import  into 
the EU brings us back to the initially discussed gen-
eral issue that an appropriate regulatory framework 
and  an  adequate  level  of  coherence  between  the 
involved  Southern  and  Northern  Mediterranean 
countries  do  not  exist.  The  problem  of  the  neces-
sary ‘’traceability’, i.e. tracing the flows plus tracing 
the  quality  of  produced  and  exported  RES-E,  adds 
to the complexity. There are several questions open 
such  as  the  RES  nature  certification  requirements, 
the  measurement  of  RES  volume  being  RES-E  for 
the downstream support scheme, the adaption of the 
downstream  RES  support  scheme  to  the  particular 

16.  Note that the requirements below are no general import require-
ments  for  RES-E  into  the  EU  but  matter  only  where  Member 
States  wish  to  count  the  third  country  RES-E  for  their  RES  tar-
get  compliance.  This  is  already  happening  in  Morocco,  Jordan 
and  Egypt  (see  mirror  field  of  Kuryamat  150  MW  CSP  below), 
where  competitive  tenders  are  launched  to  enact  national  plans 
and where industrial off-takers are using wind and solar plants to 
feed their factories, regardless of Article 9

cost profile of the upstream RES generation. In case 
of transits inside the EU, it is unclear how to ensure 
priority  access  for  Southern  Mediterranean  RES-E 
only transiting in a given Member State, the nomi-
nation  and  measurement  rules  for  transit  RES-E 
balancing-settlement. On the Southern shore prob-
lems arise around the green facility certification, the 
measurement of green generation output and green 
injections  into  the  grid,  congestion  management, 
dispatch  priority,  balancing  rules,  or  access  to  the 
interconnection, just to name a few. 

Such results leads us to conclude that since Article 
9 allows Member States to use RES-E from non-EU 
countries  for  their  EU-RES  target  compliance  only 
if  the  green  energy  is  physically  imported  into  the 
EU  (and  does  not17  allow  for  statistical  transfers 
between the Member States and the third countries), 
this  provision  may  rather  provide  an  incentive  for 
enhanced  North-South  energy  cooperation  than 
offer an actual ready-to-use framework or ‘platform’ 
for  RES-E  exchanges.  Thus,  it  may  be  understood 
as a rationale for regional market integration. Note 
however, that the Commission intends to create fur-
ther  incentives  to  invest  in  RES-E  in  the  Southern 
Mediterranean  region  and  hence,  as  a  first  gesture 
of  its  ‘good  will’  claimed  in  its  Communication  of 
7  September  201118  that  it  will  consider  improving 
the RES Directive’s conditions for joint projects with 
third countries as long as it does not undermine the 
targets for renewable in the EU. In fact, interpreta-
tive  guidelines  on  how  to  actually  implement  joint 
projects under Article 9 is expected for the course of 
this year 2013.

17.  Note that the RES Directive provides that Member States may re-
ceive credit for RES-E consumed in a third country during con-
struction  of  an  interconnector  commenced  on  or  before  31  De-
cember 2016 and under certain limited conditions.

What involvement is necessary at the EU level? 19

Despite an abundance of literature stating the con-
trary, notably that the current bottom-up approach 
to Euro-Mediterranean RES-E trade is characterized 
by  non-binding  advice,  regional  institutions  and 
harmonisation efforts at the regional level, EC Com-
munications  and  declarations  point  into  another 
direction.  If  the  EU  is  to  institutionalize  energy 
relations  with  North  Africa  or  any  other  country 
multilaterally, it should rely on an extension of the 
Energy  Community,  or  on  a  new  North  African 
Energy  Community  (such  findings  clearly  derive 
from  the  European  institutions  Communications). 
The  Commission  explicitly  proposed  the  creation 
of  such  a  new  Community  as  a  tool  for  enhanced 
energy  exchange  and  markets  integration  around 
the  Mediterranean  basin,  based  on  a  differentiated 
and  gradual  approach.20  In  fact,  it  is  expected  that 
in the context of the presentation of the MEDREG’s 
mapping on energy infrastructure investment at the 
December 2013 meeting of Union for the Mediter-
ranean’s Energy Ministers a respective proposal will 
be discussed. 

19.  See  note  19  above  at  section  2.3:  “The  EU  should  continue  to 
include  key  principles  for  trade  and  investment  such  as  non-
discrimination  and  market  access  and  make  them  enforceable 
through effective dispute settlement procedures both in bilateral 
agreements as well as in multilateral legal frameworks. These rules 
should be negotiated to suit the specific energy relations and in-
terests of individual countries, or groups of countries. These prin-
ciples have to be complemented with rules concerning reciprocal 
and equivalent access to energy resources and networks in these 
countries, as well as investment protection, and regulatory conver-
gence regarding pricing policies, sustainability criteria and crisis 
prevention mechanisms. […]”

18.  See European Commission Communication, On security of ener-
gy supply and international cooperation - “The EU Energy Policy: 
Engaging  with  Partners  beyond  Our  Borders”,  COM(2011)  539 
final.

20.  European  Commission  Staff  Working  Document  ‘Implementa-
tion of the European Neighbourhood Policy in 2012 Regional Re-
port:  A  Partnership  for  Democracy  and  Shared  Prosperity  with 
the Southern Mediterranean’ , SWD(2013) 86 final, attp. 17.

9 ■  EU Energy Policy for Mediterranean Renewables

-

N
N
E
-
6
0
1
-
3
1
-
I
A
-
M
Q

Conclusion 

More Euro-Mediterranean RES-E exchange is plau-
sibly feasible in the near future. It is true that a full 
harmonization  of  electricity  legislation  among  EU 
and  MENA  countries,  while  ideal,  would  require 
a level of regulatory accord that still does not exist 
in the EU (nearly two decades after liberalization). 
However a timely achievement of the EU 2020 tar-
gets only demands a minimum of regulation that is 
adaptable by a limited number of voluntary affected 
parties, i.e. a few producer countries, a few consumer 
countries, a few transit countries (if any) and some 
private  entities,  such  as  the  project  entrepreneurs 
and their lenders. Non-binding guidance at the EU 
level could therefore be the tool of choice for a trade 
enhancement in the short term. This would lead to 

a  built-in  timeline  mechanism  aimed  at  achieving 
more  market  integration  in  the  longer  term.  Non-
binding  guidance  is  preferable  to  our  eyes  because 
it  (a)  permits  the  interested  parties  to  negotiate  an 
agreement  with  the  flexibility  that  is  necessary  to 
respond  to  fluid  economic  or  regulatory  condi-
tions  and  (b)  mitigates  the  risk  that  investors  will 
be retroactively subject to changes in the regulatory 
framework without the ability to modify the project’s 
controlling agreement. Early binding rules issued by 
the Commission would presumably increase capital 
costs  (perhaps  prohibitively)  by  causing  an  invest-
ment’s  regulatory  misalignment  among  players. 
Moreover,  the  enactment  of  such  a  binding  piece 
of legislation could entail a multi-year process that 
would effectively overshoot the core timeline of the 
EU-Med development process (2020).

Florence School of Regulation
Robert Schuman Centre  
for Advanced Studies

European University Institute
Villa Malafrasca 
Via Boccaccio 151
50133 Firenze - Italy

Contact FSR coordinator:
Annika.Zorn@eui.eu

The Florence School of Regulation 

The Florence School of Regulation (FSR) was founded in 2004 as a partnership between the Council of the 
European Energy Regulators (CEER) and the European University Institute (EUI), and it works closely 
with the European Commission. The Florence School of Regulation, dealing with the main network indus-
tries, has developed a strong core of general regulatory topics and concepts as well as inter-sectoral discus-
sion of regulatory practices and policies.

Complete information on our activities can be found online at:  fsr.eui.eu

© European University Institute 2013
Content © Authors, 2013

10 ■  FSR - Policy Brief ■ Issue 2013/06 ■ October 2013