29 November 2018

Cătălin Stănescu publishes article on nuclear energy investments

The article is titled “Stabilization Mechanisms for Nuclear Investments v. Electricity Market Liberalization: The Case of Contract for Difference. Lessons from the United Kingdom and Romania” and it is published in the European Energy and Environmental Law review, Vol 27, no 6, December 2018, by Kluwer Law International.

The article addresses Contracts for Difference as state aid and price stabilization mechanisms needed to mitigate the risks stemming from the incompatibility of liberalized energy markets and nuclear energy investments. It starts by defining the Contract for Difference mechanism as state aid required to support nuclear investments. It continues by analyzing the issue of state aid in relation to the nuclear sector, with focus on the “market failure” argument as it transpires from both the European Commission’s assessment of the state aid scheme and the decision of the Grand Chamber of The Court of Justice of the European Union. Attention is dedicated to the uses of the same support scheme in two similar nuclear projects in Hinkley Point (United Kingdom) and Cernavoda (Romania). The article concludes that given the systemic differences between the two national energy markets, Contracts for Difference might not be a suitable solution for both of them.

The article is part of CEVIA’s framework research project ‘Long-Term Private and Public Contracts – Flexibility and Stability’ funded by the Danish Research Council and was presented at the 6th International Symposium on Environment and Energy Finance Issues (ISEFI – 2018), Paris, France.