This policy brief summarises the reasoning and the results of the Microeconomix/FSR research report: “Regimes for granting right to use hydropower in Europe” prepared for Assoelettrica and Federutility. The study was presented on 7 October 2014 to energy attachés from the 28 permanent representations in Brussels.
The study of hydropower regimes in European countries reveals the considerably variable terms of hydropower usage rights, in their joint obligations and the degree to which the competition processes for granting these rights is open.
The environmental and economic stakes and liabilities, associated with the use of hydropower, account for the in-depth public controls in granting these rights. Nevertheless, the noted differences among hydropower regimes in Europe cannot be explained by rational environmental or economic criteria, and could introduce competition distortion within the European common electricity market.
Over the last decade, the European Commission has opened several infringement procedures to prompt the implementation of competitive processes, but they have not been undertaken with a “Europeanised” approach, which would ensure a similarity of efforts throughout Member States to open competition to access hydropower. The current diversity amongst Member States creates obstacles for the countries that have engaged in a competitive renewal process, as they are faced with the lack of a level playing field and a coherent reference framework.
Thus, the fragmented state of European hydropower regimes requires significant efforts from the European Commission, and the institutional stakeholders, to stimulate harmonisation. The actions of the Commission and its Directorates-General must be coordinated and delineated, and new, clear steps must be taken to urge national and regional authorities to harmonise their rules of attribution and mitigate competition distortions.