Companies operating in EU energy markets are facing an unprecedented range of challenges that affect the way in which they do business: activist antitrust enforcement, far-reaching regulatory reforms aiming at achieving an EU internal energy market and climate change objectives – reforms that challenge conventional wisdom in the industry. The Regulation on energy market integrity and transparency (REMIT) extends financial market rules to the core business of energy companies and intermittent generation sources put into question the ability of the internal market to deliver sufficient new investment.
Energy forms a core part of the EU’s 2020 Agenda to strengthen EU competitiveness and battle climate change. The European Commission is launching a steady stream of projects and proposals to achieve its core objectives of market integration and secure, efficient and sustainable energy supply. Moreover, in its Communications on Energy 2020, the 2050 Energy Roadmap and on making the internal market work, the European Commission has made clear that “pro-active competition enforcement, not only by the Commission, but also by Member States, is needed” to achieve EU objectives. The current activist enforcement agenda is set to continue in the years to come across all instruments (antitrust, merger and State aid control).
The complexity of the current environment requires a multi-disciplinary approach integrating antitrust, regulatory and government affairs capabilities. This is Covington’s core strength. Our European team of competition, regulatory and government affairs experts has the skills, experience and insights that enable clients to navigate this complex and multifaceted environment safely and effectively. We help clients identify threats before they materialize and opportunities before they are missed and devise effective strategies to neutralize or minimize exposure. Our team has a unique blend of expertise and understanding of European energy, competition and climate change law and policy. We understand the energy sector and the issues that it faces. Members of our team have extensive experience from European institutions. We know how the European institutions think and operate. This puts us in a unique position to develop effective strategies and solutions.
Representative Matters
Abuse of Dominance
We advise clients in avoiding exposure and assists them in European Commission investigations. Abuse of dominance has been a core Commission focus in recent years and our team has extensive experience in dealing with abuse of dominance, including foreclosure and market manipulation allegations. In the post-Third Package environment the focus is shifting from a narrow focus on vertical integration of national incumbent generators and gas importers to broader concerns about foreclosure of key inputs such as fuel, sites and grid capacity and various cooperation arrangements. Market access and new investment remain key themes and the Commission’s current investigation into Central and Eastern European gas markets demonstrate a new willingness to challenge pricing mechanisms when they distort markets.
Cooperation arrangements and supply contracts.
We advise clients on all forms of cooperation arrangements between competitors and non-competitors, including joint ventures on the construction and operation of power plants, joint extraction and commercialisation of gas and long-term supply contracts at all levels of the supply chain. Our advice helps clients achieve their commercial objectives without ending up on the wrong side of the line.
Mergers
There is more to merger control than filling in forms. Our extensive knowledge of how energy markets function and of sector specific regulation has enabled our team to anticipate merger specific competition concerns, devise effective case strategies and deliver results to our clients.
State Aid
As support schemes proliferate State aid is intensifying. We assist client in devising schemes such that they withstand scrutiny and in managing risks and exposure relating to existing schemes.
Regulatory
We advise clients on the interface between competition law and regulation; the implementation of the Third Package and a range of issues relating to new rules including REMIT. Our extensive knowledge and understanding of EU law and policy enables us to look through the black letter of the law and provide highly valued advice.
Illustrative List of Clients
- ČEZ
- DONG Energy
- Electricité de France (EDF)
- E.ON
- Fortum Corporation
- OMV and OMV Petrom
- Vestas
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