OPPORTUNITY OR TRAP?
2. Consumer activeness as democratisation
The implementation of Directive 2019/944/EU gave rise to another “consumer model”: the prosumer, i.e. the producer-and-consumer amalgam. As it has been stressed elsewhere,[80] the involvement of “prosumers” in economic activity seriously blurs the traditional production/consumption paradigm, questioning the classic consumer protection model based on the dichotomy between suppliers and consumers.
The Directive does not directly refer to the term prosumer, however it regulates cases where energy consumers produce or co-produce their energy demand individually or through collective organisations. Articles 15 and 16 of the Directive provide for the “active customer”
and the “citizen energy communities'', meaning consumers who consume, store or sell electricity generated on their premises, but not as a commercial/professional activity.
Prosumers are expected to play a central role in the new energy market design, as they can help change the production patterns. Generating electricity in small hubs will decentralise the energy production, thus bringing a form of energy democracy in the current scheme.[81] These elements of democratization are that have driven some researchers to describe prosumers as the energy citizens.[82] And this might be the answer to the problem raised before, as for the EU law’s legitimation. Harmonizing EU law might deprive citizens from largely contributing to any legal process. However, if consumers produce their own energy, then they have a participation in the factual process: self-determination is even more powerful in this case.
Choice is all the more strengthened and its repercussion is multiplied: it is not only choice among offers but also choice to act autonomously.
However, besides the sense of empowerment and independence such a concept would entail, the prosumer concept should be considered as a quite uncertain one. The EU has not clarified their legal position and their status still remains indefinite and, to some extent, perilous.
Prosumers are most likely to engage in the so-called mixed transactions, playing different roles simultaneously in the energy market.[83] If their situation is not further clarified, then both prosumers, as well as their co-contractors undertake important risks. Prosumers should know for which transactions they act as businesses and when they enjoy the consumer law protection.
In any other case, the possibility for one to undertake self-generation or become a member of an energy community initiative will seem unattractive.
55 IV. CONCLUSION
The all-recent Directive 2019/944 has instituted far-reaching rules aiming to mobilise consumers to interact with the supplier companies. The fact that the energy market remains one of the most complex, sophisticated and difficult to understand is unquestionable. In the short period during which the Directive has been implemented, these difficulties do not seem to be eliminated or even diminished. More than recasting the EU rules may be needed for consumers to get involved into the energy play in the long run. Time is required if consumers are to familiarise themselves with the multiple factors affecting their energy cost and learn how to control it; taking the centre stage will only follow later in time. Further, energy markets have been labelled as “problem markets”, in the sense that they fail delivering optimal results.
As market conditions had started maturing, the international turmoil unfolding these last months has added new uncertainties. Energy prices in Europe are soaring, reaching unprecedented levels. The sharp increase is mainly due to the tight connection of the electricity market to the one of gas and the unforeseen invasion of Ukraine by the Russian Federation army, bringing uncertainty for the future availability of gas and oil supplies.
Notwithstanding the fact the current market architecture is not formally put into question,[84]
the truth is that focus has changed once again. The European Commission has encouraged governments to take measures to protect final consumers directly,[85] shifting the spotlight from the EU back to Member States again. It remains to be seen whether this change of attitude will be transcribed into legal texts, and how. The ongoing energy crisis may serve as a testbed for existing legislation and for consumer protection in this field. The experience gained so far shows that customers shall always be treated as customers: granting them responsibilities for the market opening and operation should not be overwhelming, or else the outcomes may be counter-intuitive, requiring fresh EU interventions.
[3] H-W. MICKLITZ, “Social Justice and Access Justice in Private Law”, EUI Working Papers no 2, 2011, p. 1.
[4] K. CSERES, “Universal Service and Consumer Protection: A Paradigm Shift in EU Law”, European Competition and Regulatory Law Review, no 1, 2017, p. 289.
[5] H-W. MICKLITZ, “The Consumer: Marketized, fragmentized, constitutionalized” in D.
LECZYKIEWICZ, S. WEATHERILL (eds), The Images of the Consumer in EU Law: Legislation, Free Movement and Competition Law, Hart Publishing, 2016, p. 28.
[6] CJEU 16 July 1998, Gut Springenheide GmbH and Rudolf Tusky v Oberkreisdirektor des Kreises Steinfurt - Amt für Lebensmittelüberwachung, no 210/96, 16 July 1998. A. NORDHAUSEN SCHOLES, “Behavioural Economics and the Autonomous Consumer”, Cambridge Yearbook of European Legal Studies no 14, 2012, p. 297 – 324.
56
[7] See, for example, CJEU 13 December 1990, Pall Corp. v P. J. Dahlhausen & Co, no 238/89, 13 December 1990, CJEU 2 February 1994, Verband Sozialer Wettbewerb eV v Clinique Laboratoires SNC and Estée Lauder Cosmetics GmbH no 315/92 2 February 1994, CJEU 6 July 1995, Verein gegen Unwesen in Handel und Gewerbe Köln e.V. v Mars GmbH, no 470/93, 6 July 1995, CJEU 16 January 1992, Criminal proceedings against X. Reference for a preliminary ruling: Tribunal de grande instance de Bergerac – France, no 373/90, 16 January 1992.
[8] KJ CSERES, “The Active Energy Consumer in EU law”, European Journal of Risk Regulation no 9, 2018, p. 229.
[9] H-W. MICKLITZ, L. A. REISCH, K. HAGEN, “An Introduction to the Special Issue on
“Behavioural Economics, Consumer Policy, and Consumer Law” Journal of Consumer Policy no 34 2, 2011, p. 72; see also G. HELLERINGER and A-L. SIBONY, “European Consumer Protection Through the Behavioral Lense” Columbia Journal of European Law no 23, 2017, pp. 607-646 (with a first footnote with extensive bibliography).
[10] K. PURNHAGEN, “More Reality in the CJEU’s Interpretation of the Average Consumer Benchmark – Also More Behavioural Science in Unfair Commercial Practices?” European Journal of Risk Regulation no 8, 2017, p. 437.
[11] CJEU 23 December 2015 Scotch Whisky Association and Others v The Lord Advocate and The Advocate General for Scotland, no 333/14 23 December 2015.
[12] K. PURNHAGEN, (n 7), p. 439.
[13] EGC 12 September 2007, Koipe Corporación, SL v European Union Intellectual Property Office), no 363/04 12 September 2007.
[14] CJEU 1 October 2019 Bundesverband der Verbraucherzentralen und Verbraucherverbände - Verbraucherzentrale Bundesverband e.V. v Teekanne GmbH & Co. KG no 195/14, 1 October 2019.
[15] CJEU 26 March 2020, JC v Kreissparkasse Saarlouis, no 66/19 26 March 2020.
[16] Directive no 96/92/EC of 19 December 1996 concerning common rules for the internal market in electricity, 30 January 1997.
[17] Directive no 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, 14 August 2009.
[18] W. MICKLITZ and G. SAUMIER, “Enforcement and Effectiveness of Consumer Law” in H-W. MICKLITZ and G. SAUMIER (eds), Enforcement and Effectiveness of Consumer Law, Springer, 2018, p. 5
[19] CJEU 21 March 2013, RWE Vertrieb AG v Verbraucherzentrale Nordrhein-Westfalen eV, no 92/11, 21 March 2013.
[20] CJEU C- 92/11, para 55.
[21] D. QUADRI ILKHANI and E. WOERTZ, “Local Energy Provision: The Role of Cities and Bottom-up Initiatives”, CIDOB Policy Brief, 2019, p. 3.
[22] Vattenfall not awarded the electricity grid concession in Berlin, Press Release (5 march 2019) <
https://group.vattenfall.com/press-and-media/pressreleases/2019/vattenfall-not-awarded-the-electricity-grid-concession-in-berlin>, accessed 3 July 2022.
[23] See, for example: Keep Talking Greece, ‘Greece’s consumers fight back: INKA files legal action against “adjustment clause” on electricity bills’ (28 March 2022) <
57
https://www.keeptalkinggreece.com/2022/03/28/greece-electricity-bills-adjustment-clause-inka-legal-action/ > accessed 3 July 2022, Athens News, ‘INKA sues ‘amendment clause’ in electricity bills’ (28 March 2022) < https://en.rua.gr/2022/03/28/inka-sues-amendment-clause-in-electricity-bills >
accessed 3 July 2022.
[24] Allegedly, the Regulatory Authority for Energy is receiving almost 1,000 consumer complaints every week regarding this subject. See Chryssa Liaggou, ‘Power bills bringing misery’ (eKathimerini, 18 April 2022) < https://www.ekathimerini.com/economy/1182465/power-bills-bringing-misery >
accessed 2 July 2022.
[25] The Brussels Times, ‘Federal government reaches agreement to curb rising energy bill’ (12 October 2021) < https://www.brusselstimes.com/188861/federal-government-reaches-agreement-to-curb-rising-energy-bill> accessed 2 July 2022.
[26] G. SGARAVATTI, S. TAGLIAPIETRA and G. ZACHMANN, “National policies to shield consumers from rising energy prices” (Bruegel Datasets, last update: 8 February 2022)
<https://www.bruegel.org/publications/datasets/national-policies-to-shield-consumers-from-rising-energy-prices> accessed 2 July 2022.
[27] A. TIDEY, ‘Brussels agrees to 'Iberian exception' allowing Spain and Portugal to cap electricity prices’ (euronews, 26 April 2022) <https://www.euronews.com/my-europe/2022/04/26/brussels-agrees-to-iberian-exception-allowing-spain-and-portugal-to-cap-electricity-prices> accessed 2 July 2022.
[28] H-W. MICKLITZ, L. A. REISCH, K. HAGEN (n 6), p. 271.
[29] For a good introduction on nudge and the law, see A. ALEMANNO and AL SIBONY (eds) Nudge and the Law: A European Perspective, Oxford/Portland, Hart, 2015; F. ESPOSITO, “Conceptual foundations for a European Consumer law and behavioural sciences scholarship in Research Methods”, in H-W. MICKLITZ, A-L. SIBONY, F. ESPOSITO (eds), Consumer Law: A Handbook, Edward Elgar Publishing Limited, 2018, p. 38.
[30] Directive no 2019/944 of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU, 14 June 2019, Recital 10.
[31] Directive 2019/944, art 11.
[32] Directive 2019/944, art 19.
[33] Directive 2019/944, art 18.
[34] P. WINTOUR, ‘David Cameron's 'nudge unit' aims to improve economic behavior’ (The Guardian, 9 September 2010) < https://www.theguardian.com/society/2010/sep/09/cameron-nudge-unit-economic-behaviour > accessed 1 July 2022.
[35] D. CAMERON, ‘The next age of government’ (TEDTalks, 16 February 2010) <
https://www.ted.com/talks/david_cameron_the_next_age_of_government?language=en > accessed 1 July 2022.
[36] COUNCIL OF EUROPEAN ENERGY REGULATORS (CEER), “Billing Issues in the Clean Energy for All Europeans Package”, Customer Empowerment Work Stream, 2021, p. 21.
[37] EnergyPress, ‘RAE’s standardized power-bill guidelines officially announced’ (3 June 2022) <
https://energypress.eu/rae-plan-for-standardized-electricity-bills-officially-announced/ > accessed 1 July 2022.
[38] Diretiva no 6/2015, Diário da República, 2.a série — N.o 81 — 27 April 2015, “Provision of pre-contractual and pre-contractual information to electricity and natural gas consumers in mainland Portugal”
58
(Prestação de informação pré-contratual e contratual aos consumidores de eletricidade e de gás natural em Portugal continental) <https://files.dre.pt/2s/2015/04/081000000/1031610319.pdf > accessed 1 July 2022.
[39] See some examples: https://entreprises.es.fr/Media/Files/EntreprisesV2/Electricite/Offre-a-prix-fixe-Fiche-descriptive-de-l-offre, https://particuliers.engie.fr/content/dam/pdf/fiches-descriptives/fiche-descriptive-elec-reference.pdf .
[40] “Form of General Conditions for the Supply of Electricity to Domestic Customers” (Modulo delle Condizioni Generali di Fornitura di Energia Elettrica ai Clienti Domestici), Annex 1- June 2020
<https://www.arera.it/allegati/consumatori/placet_ele_dom.pdf > accessed 1 July 2022.
[41] According to Article L441-6 of the French Code de commerce
<https://www.legifrance.gouv.fr/codes/section_lc/LEGITEXT000005634379/LEGISCTA00003841104 7/#LEGISCTA000038411047> accessed 1 July 2022.
[42] COUNCIL OF EUROPEAN ENERGY REGULATORS (CEER) (n 26), p. 27.
[43] The EU target model is based on: (i) the development of integrated regional wholesale markets, in which prices provide important signals for generators' operational and investment decisions; and (ii) market coupling based on the so-called 'flow-based' capacity calculation, a method that takes into account that electricity can flow via different paths and optimises the representation of available capacities in meshed electricity grids.
[44] COUNCIL OF EUROPEAN ENERGY REGULATORS (CEER), “CEER 2022-2025 Strategy, Empowering Consumers for the Energy Transition”, 2021, p. 18.
[45] EUROPEAN COMMISSION, “Consumer Markets Scoreboard - Making markets work for consumers”, 2018 edition, para 53.
[46] Tim Harford, ‘What nudge theory got wrong’ (FT Magazine, 6 May 2022)
<https://www.ft.com/content/a23e808b-e293-4cc0-b077-9168cff135e4> accessed 3 July 2022.
[47] A. N. HATZIS, “Economic Analysis of the Law of Contracts” Digesta no 3, 2003, p. 331 (in Greek).
[48] N. GANE, “Nudge Economics as Libertarian Paternalism” Theory, Culture & Society no 38, 2021, p. 122.
[49] R. H. THALER and C. R. SUNSTEIN, Nudge: Improving Decisions About Health, Wealth, and Happiness, Yale University Press, 2008, p. 5.
[50] Ibid.
[51] THE EUROPEAN CONSUMER ORGANISATION - BUREAU EUROPÉEN DES UNIONS DE CONSOMMATEURS (BEUC), “Stalling the switch - 5 barriers when consumers change energy suppliers”, 2017, p. 9.
[52] EUROPEAN COMMISSION, “Evaluation of the EU Framework for Metering and Billing of Energy Consumption” (SWD/2016/0399 final - 2016/0376), p. 17.
[53] Ibid.
[54] EUROPEAN COMMISSION, “Second consumer market study on the functioning of the retail electricity markets for consumers in the EU”, 2016, p. 107.
[55] THE EUROPEAN CONSUMER ORGANISATION - BUREAU EUROPÉEN DES UNIONS DE CONSOMMATEURS (BEUC) (n 40), p. 5.
59 [56] Directive 2019/944, Recital 32.
[57] COUNCIL OF EUROPEAN ENERGY REGULATORS (CEER), “CEER Report on commercial barriers to supplier switching in EU retail energy markets”, 2016, p. 7.
[58] ACER/CEER, “Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2014”, 2015, para 244.
[59] Directive 2019/944, art 12.
[60] Directive 2009/72/EC, Recitals 1, 20, 51, 57, art 3, Annex Ι.
[61] Florence School of Regulation, ‘How is the EU electricity retail market doing, 15 years after liberalisation?’ (FSR, 14 March 2022) <https://fsr.eui.eu/how-is-eu-electricity-retail-market-doing-15-years-after-liberalisation/ > accessed 1 July 2022.
[62] COUNCIL OF EUROPEAN ENERGY REGULATORS (CEER), “Monitoring Report on the Performance of European Retail Markets in 2018”, 2019, p. 36.
[63] Natalie McCoy (ERSE and ACER) in the FSR debate: Electricity retail market liberalisation: 15 years on < https://fsr.eui.eu/event/electricity-retail-market-liberalisation-15-years-on/> accessed 1 July 2022.
[64] M. DANI, “Assembling the Fractured European Consumer”, European Law Review no 36, 2011, p. 362.
[65] The European Council, ‘EU Single Market’ < https://www.consilium.europa.eu/en/policies/deeper-single-market/ > accessed 1 July 2022.
[66] Directive 2019/944, recital 33 & 48, art 3, 4, 10, 11, 12, 16, 16.
[67] EUROPEAN COMMISSION, “Consumer vulnerability across key markets in the European Union”, Final Report, 2016, p. xix.
[68] See CMA, Energy Market Investigation: Final Report (24 June 2016) https://assets.publishing.service.gov.uk/media/5773de34e5274a0da3000113/final-report-energy-market-investigation.pdf%20%3e%20%20%20accessed%2030%20June%202022 accessed 2 July 2022.
[69] Ibid, para. 158.
[70] M. IOANNIDOU and D. MANTZARI, “The UK Domestic Gas Electricity (Tariff Cap) Act: Re-regulating the Retail Energy Market”, Modern Law Review no 82, 2019, p. 490.
[71] Domestic Gas and Electricity (Tariff Cap) Act 2018 (c. 21)
<http://www.legislation.gov.uk/ukpga/2018/21/contents/enacted/data.htm> accessed 30 June 2022.
[72] OFGEM, ‘Check if the energy price cap affects you’ <https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you > accessed 2 July 2022.
[73] France24, ‘France : le gouvernement va "bloquer les prix du gaz" jusqu'en avril, annonce Jean Castex’ (30 September 2021) < https://www.france24.com/fr/info-en-continu/20210930-france-le-gouvernement-va-bloquer-les-prix-du-gaz-jusqu-en-avril-annonce-jean-castex > accessed 4 July 2022.
[74] According to Statistics Norway (SSB).
[75] ARERA, ‘Press release - Energy: the PLACET offer will be launched in 2018 with predefined contractual conditions and free pricing, easy to understand and compare’ (31 July 2017)
<https://www.arera.it/allegati/com_stampa/17/170731eng.pdf> accessed 3 July 2022.
60
[76] COUNCIL OF EUROPEAN ENERGY REGULATORS (CEER), “Implementing Consumer rights of the Clean Energy for All Europeans Package - Selected Case Studies”, 2019, p. 15.
[77] Decision 389/2022 “Guidelines for adopting a standard template "Application for Electricity Supply" and "Electricity Bill" and for strengthening the principles of transparency, easy-understanding and comparability, in the pre-contractual and contractual stage”.
[78] HEDNO, ‘Social Residential Tariff’ <https://deddie.gr/en/upiresies/eidika-timologia/koinwniko-oikiako-timologio/ > accessed 4 July 2022.
[79] EUROPEAN COMMISSION, “REPowerEU: A plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition”, 2022.
[80] V. HATZOPOULOS, The Collaborative Economy and EU Law, Oxford/Portland, Hart, 2018, Chapter 2.
[81] EUROPEAN PARLIAMENT, Electricity Prosumers (Briefing, 11 November 2016)
<https://www.europarl.europa.eu/RegData/etudes/BRIE/2016/593518/EPRS_BRI(2016)593518_EN.p df > accessed 4 July 2022.
[82] B. KAMPMAN, J. BLOMMERDE and M. AFMAN, ‘The potential of energy citizens in the
European Union’ (September 2016)
<https://ce.nl/wp-content/uploads/2021/03/CE_Delft_3J00_Potential_energy_citizens_EU_final_1479221398.pdf>
accessed 4 July 2022.
[83] K CSERES, “The Active Energy Consumer in EU law” (n 5), p. 234.
[84] EU Agency for the Cooperation of Energy Regulators (ACER), Final Assessment of the EU Wholesale Electricity Market Design (Report, 29 April 2022) < https://www.acer.europa.eu/events-and-engagement/news/press-release-acer-publishes-its-final-assessment-eu-wholesale> accessed 4 July 2022.
[85] “Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions - Tackling rising energy prices: a toolbox for action and support” (COM(2021) 660 final).
61