Same Rules, Different Watchdog: Power Purchase Agreements in Iceland and the Prospect of EU Accession

Sammanfattning

The thesis explores the differences between the enforcement of State aid within the EU compared to the EEA EFTA States, in an effort to find out whether Iceland’s accession to the EU could affect the legal status of power purchase agreements entered into by Iceland’s National Energy Company, Landsvirkjun, and energy-intensive user. These agreements have already been reviewed by the EFTA Surveillance Authority on several occasions, and are somewhat controversial in Iceland, especially as regards the pricing of the energy sold. Accordingly, the thesis contains an overview of EU and EEA State aid law, as well as enforcement mechanism found therein. Moreover, the power purchase agreements themselves are explored, as well as the relevant existing decisional practice of the EFTA Surveillance Authority. That practice is then compared with relevant jurisprudence and the practice of the Com-mission in similar matters. Additionally, potential gaps in enforcement are taken into account, along with political influences, all of which are liable to affect the legal standing of the aforementioned agreements. Ultimately, the thesis finds that, while it might be difficult to assert that the legal status of the power purchase agreements would be negatively affected by Iceland’s accession to the EU, it is very likely that they would be subject to more active and detailed examinations than currently, given the Com-mission’s institutional strengths compared to the EFTA Surveillance Authority, increased access to judicial remedies for third parties, and, to some extent, the political climate within the EU.