Fearing Retaliation: Norway Accepts New EU Energy Rules

Written by | Tuesday, March 27th, 2018

The Norwegian parliament gave a green light to the adoption of the new European Union energy rules despite the objections of some center-left parties, allowing the country to remain a full member of EU markets. The Scandinavian nation was worried that rejecting the EU’s Third Energy Package would lead to a loss of close relations with the EU. The new energy package is designed to help energy flows and enhance regulatory oversight.

Norway is a member of the European Economic Area (EEA), which provides for the free movement of persons, goods, services and capital within the European single market, including the freedom to choose residence in any country within this area. Having been established in 1994, the EEA has been providing Norwegian companies with equal access to Europe’s single market on equal terms with companies in the EU via the EEA treaty, in return for the country’s adoption of EU common market regulations. Under the EEA treaty, Oslo retains the right to say no to EU rules, but has never done so since this would allow Brussels to suspend other parts of the agreement.

The EU’s Third Energy Package is a regulatory package for an internal gas and electricity market in the bloc. The aim of the package is to further open up the gas and electricity markets in the European Union. Key elements of the third version include ownership unbundling, which spells out the separation of companies’ generation and sale operations from their transmission networks, and the establishment of a National regulatory authority (NRA) for each member state, and a forum for NRAs to work together. To make sure that the new EU rules are supported, the Norwegian government found a compromise in advance with the main opposition Labor Party, pledging that all power cables connecting Norway to other countries ought to be state-owned.

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