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This volume discusses the European "2050 Energy Roadmap to a law Carbon Economy: Energy Policy & Innovation." It represents the outcome of the 3rd Academic Roundtable of the Loyola de Palacio Chair at the European University Institute held in Florence in 2011. Besides academic articles, speeches and opinions, it contains reports of the THINK Tank of DG Energy hosted in Florence.--

European Energy Policy is changing and multifold. It would be better to say that EU had six very different policies for energy since 1980. I will look deeper at only four of them: the single energy market, and three successive programs of European energy transition. Each of these four policies is or has been a genuine challenge, as European Commission does not have a strong executive power, and a detailed enough field-administration machinery to implement such policies. All European successes, with no equivalent in today's world, are coming from deep and patient compromises between the weak EU layer of decision-making and the decisive national implementation resources.

There are 'seams' when TSOs (Transmission System Operators) do not perform the same tasks in the same manner on the different sides of their borders. Seams are consequential for electricity systems because power flows are strongly interactive where interconnected grids link many TSOs and countries like in the EU. Seams are very consequential in the EU because we have a common continental open market while access to the grids, congestion management, and balancing of the flows are performed by individual TSOs. It took 20 years to the EU to really address this 'seams' issue: why? How did it change and how far? Will the EU new 'Network Codes' finally create a seamless EU interconnected system and internal market? Or not?

The European Union took more than 20 years to start defining a common market design for its internal electricity market: a European Power Target Model. And, a further 10 years to fully implement it. Meanwhile, the reference generation set of that model has shifted from CCGT burning gas to RES units transforming intermittent natural resources. Could the existing EU target model continue to work well for the short- term operation and long-term investment? If not, can the existing EU institutions easily produce an "RES resilient" new power target model?

QM-02-15-058-EN-N ; No EU policy can be perfect – it will inevitably be a compromise between a good cause and a due cause. However, we are now at a critical turning point, as several pillars of former Barroso's EU energy policy have already collapsed, prompting an update or an entire overhaul. Then what are the key components that can put EU energy policy back on track toward reaching our 2020-2030 goals? This Manifesto offers a new vision of the energy policy for our new Commission by focusing on 5 different pillars: 1) the Internal Electricity Market, 2) the Internal Gas Market, 3) 28 national ways from 20-20-20 to 2030, 4) the Energy Policy Governance and 5) the External Energy Security and Policy.

The achievement of the internal market for energy is going ahead in the EU 15 since a model is emerging for "coupling the national markets for electricity". For about 15 years the EU 15 was made up of national markets open to each other through rules of access to the grids while organized market pricing was kept national. The main exception was in the Nordic countries (Sweden, Finland and Denmark plus Norway –not a member of the EU). In this region the coupling of national markets is obtained through a single Power Exchange being a common subsidiary of the Nordic transmission system operators (TSOs). This single PX runs a single Day Ahead market pricing zone when the grid is not constrained and splits itself into different pricing areas when structural constraints arise. This model is known as "market splitting". The Netherlands, Belgium and France did later create a less centralized single pricing mechanism by "coupling" their three national PXs with a common pricing algorithm coordinating the price formation among the three national exchanges. The empirical success of this new model has validated it as an EU model for other regional markets. A counter-model has been experimented between Germany and Denmark. It consisted of a coupling of "volumes" linking the quantities offered and demanded in the two exchanges while keeping the price formation in these two markets separated. That experiment failed and started to work again only when elements of price coupling have been introduced. Having now three workable models of market coupling, the European Union (at least EU 15) should be able to successfully achieve one layer of its internal market soon. However, several further questions are kept open such as how to successfully bridge several regional markets all over the EU 15 or how to integrate more and more PXs having different regulatory frames. A centralized approach (known as CMU) is advocating creating a single pan-European trading entity by a mandatory restructuring of all existing PXs plus a clubbing of all TSOs and the extensive harmonization of all existing national regulatory frames. An alternative approach is the one known as PCR ("Price Coupling of Regions"). It allows building a less demanding common pricing mechanism to coordinate existing PXs in a decentralized network. It is permitting grid access and trading to keep a national flavour when requested by particular local preferences.

RESUME*: Contrairement à la théorie économique dominante qui s'intéresse aux réseaux sous l'angle de la problématique des monopoles naturels et de la tarification optimale, le présent article applique à l'analyse économique de la régulation, une autre voie théorique: celle de l'analyse des institutions. L'auteur montre que l'analyse économique institutionnelle de la régulation des marchés s'éloigne des politiques de «laisser faire les forces du marché» et met en exergue deux dimensions critiques dans la production de politiques efficaces de régulation et de dérégulation. Il s'agit, d'une part, du Market design qui porte sur la conception des nouveaux mécanismes de marchés, d'autre part, du Regulatory design qui porte sur la conception des nouveaux mécanismes de régulation. L'article passe ainsi en revue diverses structures de gouvernance (bilatérales, multilatérales ou trilatérales) adaptées à la spécificité des transactions impliquées par les activités en réseau. Il met également en évidence la nécessité de construire des institutions capables d'encadrer une ou des décennies de transition et qui tiennent compte des interventions des différents acteurs et en particulier des détenteurs d'un droit de veto.