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States that have implemented a sector specific regualation to ensure competiveness in their energy sector are for example:

A. EU Member states

I. State A
(written by...CROATIA

1. REGULATORY APPROACH

In the last decade Croatian energy sector has undergone significant structural changes in order to meet the legal and institutional EU requirements. It has been liberalized by the implementation of sector specific regulation in order to establish and maintain market competition.

Such approach ensures objective, transparent and non-discriminative carrying out of energy activities and adaption of principles of regulated access to the network/system as well as development of methologies for determination of tariffs systems and tariff itself in order to establish efficient and competitive energy market and protect consumers and energy operators.

Footnote Macro

http://www.ebrd.com/downloads/legal/irc/countries/croatia.pdf, 06.05.2014.

In general, there are three basic objectives of the regulatory regime:

1. security of energy supply;

2. competitive energy system;

3. sustainable energy sector development.

Footnote Macro

http://www.hera.hr/hr/html/djelokrug.html, 06.05.2014.

Furthermore, the regulator stipulates that a goal of the regulatory approach is to build a sustainable energy system that makes a balanced contribution to security of energy supply, competitiveness and environmental protection and provides security and availability of energy supply to consumers and business sector. Such energy supply is a perquisite for economy and social development.

Footnote Macro

Ibid.

2. LEGAL FRAMEWORK

The mayor tools for liberalization and market opening were two Acts, Energy Act

Footnote Macro

Official Gazette (OF) 120/12 and 14/14.

 and Act on the Regulation of Energy Activities,

Footnote Macro

OF 120/12.

and a number of laws and bylaws regulating specific energy activities.

Footnote Macro

Electricity, gas, oil and its derivatives, biogas.

 All these legal acts create a frame for independent energy regulation fully harmonized with the EU standards.

Footnote Macro

http://www.energy-community.org/pls/portal/docs/2106179.PDF, 08.05.2014.

3. REGULATORY AGENCY

Croatian Energy Regulatory Agency (HERA) is an autonomous, independent and non-profit public institution which regulates energy activities in the Republic of Croatia with the function to establish and implement the regulation of energy sector in order to promote a viable, sustainable and efficient energy sector.

In particular, the Agency is mandated for licensing of carrying out any energy activities, activities aimed at ensuring transparent and non-discriminatory functioning of the energy market, activities aimed at ensuring transparent and non-discriminatory performance of energy activities subject to public service obligation and carrying out activities related to regulation of energy prices to be set on the basis of tariff systems.

Footnote Macro

http://www.hera.hr/en/html/activities.html, 11.05.2014.

HERA’s obligations, authorities and responsibilities are based on the Act on the Regulation of Energy Activity, the Energy Act and other regulating specific energy activities.

Footnote Macro

Ibid.

The Agency is led by the Board of 5 Commissioners, responsible to the Croatian Parliament, and the Expert Services divided in 5 sectors, providing expert, administrative and technical services for HERA.

Footnote Macro

http://www.hera.hr/en/html/organization.html, 10.05.2014.

4. ADVANTAGES AND DISADVANTAGES OF THE REGULATORY APPROACH

The regulation of energy activities in Croatia promotes efficient and rational use of energy, entrepreneurship and investments in the sector, the use of renewables and protection of environment.

Footnote Macro

Ibid.

However, a full implementation has not been achieved and not because of insufficient legal framework but for need to overcome traditional bureaucratic inertia and widespread corruption. Lately, a situation has been improved with considerable opening of the market

Footnote Macro

E.g. from 2013 two new suppliers, outside HEP (Hrvatska Elektroprivreda) RWE and GEN-I decided to offer electricity to households at lower price than HEP-DSO.

 and in future competition will continue.

Nevertheless, the major problem of the energy sector is a lack of substantial investments in modernizing the whole energy sector and energy infrastructure and consequently high import dependency.

Footnote Macro

http://www.eihp.hr/hrvatski/projekti/EUH_od_45/Energija2010.pdf, 11.05.2014.

(written by Ena Ostroski)

II. State B

(written by ...)

...