Iren Naarits

The summer trading season is coming to an end. For solar producers and the companies trading renewable generation, the past few months have again provided a concentrated view of how the electricity market behaves when substantial volumes of generation enter the system at the same time. September is therefore a natural point to review the summer and start looking at the next trading period.

For those following the market from a regulatory perspective, however, the summer has provided something else to look at. While much of the industry was taking a break, the European electricity-law agenda continued to develop. Some of the more interesting developments have not come in the form of new market rules, but through cases now before the Court of Justice of the European Union.

These cases are worth following because they concern questions that sit close to the practical boundaries of the internal electricity market: how Member States may intervene in electricity revenues, how alternative electricity supply arrangements should be understood under EU law, and how existing EU electricity-market rules apply when national measures interact with new market realities.

A judgment that puts national intervention in perspective

One of the most relevant judgments of 2026 so far is Secab, Case C-423/23, delivered by the Court of Justice on 22 January 2026. The case concerned an Italian mechanism limiting the market revenues of certain renewable electricity producers during the period of exceptionally high electricity prices.

The case arose in the context of Article 15-bis of Italian Decree-Law No 4/2022 and concerned run-of-river hydroelectric power plants. The Court was asked to clarify the relationship between the Italian measure, Article 5 of Directive (EU) 2019/944 and Articles 6 to 8 of Regulation (EU) 2022/1854, which introduced the temporary EU emergency framework for electricity-market revenues.

The judgment is particularly useful because it draws a line between what the EU emergency regulation required and what it merely allowed Member States to do. For the period from 1 December 2022 to 30 June 2023, Regulation 2022/1854 established a maximum market-revenue cap of EUR 180/MWh for the categories of electricity production covered by Article 7, while Article 8 allowed Member States, subject to specified conditions, to introduce national measures that further limited market revenues.

Importantly, the Court held that EU law did not, in itself, prevent the Italian legislation from applying a lower national cap without guaranteeing that producers retained 10% of the revenues above that cap. The Court also made clear that the mere fact that a national cap was lower than the EUR 180/MWh level in the EU regulation did not automatically make it incompatible with EU law. What mattered was whether the conditions in Article 8(2) were respected, including the requirement that the measure should not jeopardise investment signals and should ensure that investment and operating costs were covered.

The Court also rejected the argument that Italy was required to impose a corresponding cap on electricity produced from hard coal or to differentiate its cap between solar, geothermal and wind generation. The relevant provisions of Regulation 2022/1854 gave Member States options in those respects rather than imposing such obligations.

For renewable generators and investors, the broader significance of Secab is therefore not that revenue intervention is either permitted or prohibited in the abstract. It is that EU law leaves Member States a certain degree of discretion while placing substantive conditions around the way that discretion is exercised. The interaction between national intervention, investment signals and the EU electricity-market framework is likely to remain relevant well beyond the temporary measures that gave rise to the case.

A Latvian case to watch this autumn

A different question is now approaching the Court from the Baltic region.

Joined Cases C-722/24, Elektro bizness, and C-756/24, Jelgavas autobusu parks, concern the interpretation of the concept of a “direct line” under Article 2(41) of Directive (EU) 2019/944.

The cases originated in Latvia and raise questions concerning the circumstances in which an electricity line connecting a generator and a customer can qualify as a direct line. Among the issues before the Court are whether a customer must be completely disconnected from the public electricity network, whether a customer may remain connected to the network while receiving electricity through a direct line, and whether one direct line may connect a generator with several customers.

On 12 February 2026, Advocate General Juliane Kokott delivered her Opinion in the joined cases. Her proposed interpretation is significant because it focuses on the function of the direct line rather than treating connection to the public network as automatically decisive. In particular, the Opinion addresses the possibility that a direct line may exist even where the customer remains connected to the public network, provided that the electricity supplied through the direct line reaches the customer without the intermediation of the public network. The Opinion also addresses the possibility of a direct line serving several customers.

This is, however, an important point at which terminology matters: the Opinion of an Advocate General is not a judgment of the Court. The Court is not bound by the Opinion and will make the final determination.

That makes this case particularly interesting to watch. The question of what constitutes a direct line may appear narrow, but it goes to a broader issue in the internal electricity market: how much room does EU law leave for alternative arrangements between generation and consumption alongside the public network?

The answer could matter for decentralised energy projects, industrial electricity supply arrangements and other models in which the traditional relationship between generator, network and consumer is organised differently. The Court’s judgment is therefore one of the developments worth watching as the autumn begins.

Another question: how far can Member States go?

A third case worth following is Joined Cases C-251/24 and C-392/24, Axpo Energy Romania and PPC Renewables Romania. Here again, the Court has not yet delivered its judgment. Advocate General Athanasios Rantos issued his Opinion on 25 June 2026.

The cases concern Romanian legislation adopted in the context of the energy crisis which established contributions to an energy-transition fund applying to certain electricity and natural-gas market participants, including trading operators and electricity producers. The referring court has raised questions concerning the compatibility of those measures with EU law, including the rules governing the internal electricity market and fundamental principles of the EU legal order.

The Advocate General’s Opinion is therefore another useful example of the legal questions emerging from the energy crisis: when may a Member State impose additional financial obligations on participants in electricity markets, and what limits arise from EU law when those obligations affect the way in which market participants operate?

The case is not a decision on the general legality of taxation in the energy sector, nor does the Advocate General’s Opinion itself determine the final outcome. Its importance for market participants lies in the way it examines the relationship between national crisis measures and the EU framework governing electricity markets.

That distinction is worth keeping in mind as energy markets continue to evolve. The existence of a European internal market does not remove Member States’ ability to regulate or respond to exceptional circumstances. At the same time, national measures remain subject to the requirements of EU law. The boundary between those two principles is often where the most interesting legal questions arise.

Why these cases matter for new market models

Taken together, these developments point to something that is easy to miss when following energy regulation only through newly adopted legislation.

The European electricity market is not being shaped solely by new directives, regulations and policy initiatives. It is also being shaped by the interpretation of the rules that already exist.

That becomes increasingly important as the physical electricity system changes. Storage, distributed generation, flexible demand and other technologies create capabilities that do not always correspond neatly to the traditional categories of electricity-market regulation. The legal framework already contains concepts such as active customers, aggregation and energy communities, but their practical significance depends on how the relevant provisions interact with national rules and with the wider structure of the internal electricity market.

The direct-line proceedings illustrate one side of this development: an existing concept in the Electricity Directive is being tested against questions arising from increasingly decentralised electricity arrangements. Secab illustrates another: an emergency measure adopted in response to exceptional market conditions has to be assessed against an EU framework that itself gives Member States a degree of discretion while imposing conditions on the exercise of that discretion.

For companies developing or operating new energy-market models, this is where regulatory analysis becomes more than a compliance exercise. It becomes part of understanding where commercial opportunities can realistically develop.

Looking beyond the summer

The end of the summer trading season is therefore a useful moment to look in two directions at once. The trading results tell us how today’s market performed; the legal developments tell us something about the boundaries within which tomorrow’s market will operate.

There is no single court judgment that will define the future European electricity market, and none of the cases discussed here does so. Their importance is more incremental. They contribute to the interpretation of the legal framework at precisely the points where technology, market design and national regulation are beginning to meet in new ways.

That is also why the autumn ahead is worth watching. The judgment in the Latvian direct-line cases will provide the Court’s own interpretation of Article 2(41) of Directive 2019/944. Axpo Energy Romania and PPC Renewables Romania remain pending, while the Secab judgment already provides an important reference point for understanding the limits and conditions of national intervention in electricity markets.

For market participants, the practical lesson is straightforward: understanding the electricity market increasingly requires following not only prices, volumes and trading opportunities, but also the legal decisions that determine who can participate, under which conditions and through which structures.

Summer may be over. The next phase of the European electricity market is already being shaped — including in courtrooms.

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What makes the catalogue particularly noteworthy is the degree to which the Commission now treats flexibility-related mechanisms as part of the operational foundation of the future electricity market rather than merely as innovation-policy objectives. Demand response, aggregation, energy storage, dynamic pricing, smart grids, local energy communities, and digitally coordinated consumption are no longer framed as experimental or supplementary concepts. Instead, they are increasingly presented as structural tools required to maintain affordability, system stability, infrastructure efficiency, and long-term energy security.

This represents a meaningful regulatory evolution. For years, many technology-driven market participants operated in regulatory environments that formally encouraged innovation while still functioning according to assumptions built around centralized generation and relatively passive consumption patterns. As a result, market access for aggregators, distributed flexibility providers, local energy coordination platforms, and similar actors often remained fragmented, procedurally uncertain, or dependent on slow-moving national implementation processes.

The Commission’s latest approach suggests that this balance is beginning to shift more visibly toward active integration of decentralized flexibility into the core architecture of the European electricity system.

Flexibility Is Becoming Infrastructure Policy

One of the strongest signals throughout the catalogue is that flexibility is increasingly being treated as an infrastructure-efficiency mechanism rather than simply a market innovation tool. Several examples highlighted by the Commission (including capacity-based network tariffs, dynamic retail pricing, demand-response participation, smart-meter deployment, and local flexibility coordination) are directly connected to reducing grid congestion, optimising existing infrastructure, and postponing costly network expansion.

This is an important change in regulatory logic.

Historically, system adequacy and security of supply were primarily approached through generation capacity expansion and large-scale infrastructure investment. The catalogue increasingly reflects an alternative approach in which digitally coordinated flexibility is expected to become part of how the system itself is balanced and optimized. In practice, this means that technologies capable of coordinating distributed consumption, storage, and local energy flows may gradually move closer to the center of market design rather than remaining peripheral balancing tools.

The repeated references to enabling participation of aggregators and demand-response resources across day-ahead, intraday, ancillary-service, and congestion-management markets are particularly significant in this regard. These references indicate continued movement toward electricity market structures where flexibility is increasingly recognized as a system resource with measurable economic and operational value.

At the same time, the catalogue also demonstrates how closely future electricity markets are expected to depend on digital infrastructure. Smart metering, real-time data exchange, interoperability, energy data hubs, and AI-assisted permitting procedures appear throughout the document not as isolated digitalization initiatives, but as enabling conditions for the operation of future energy systems.

For technology-driven companies, this has important practical implications. Future competitiveness may depend not only on the underlying energy technology itself, but increasingly on the ability to integrate into complex data-driven regulatory ecosystems involving automated balancing, dynamic pricing, interoperable data flows, and digitally coordinated system management.

Regulatory Direction Is Clearer Than Market Readiness

Despite the strong policy direction reflected in the catalogue, the document should not be interpreted as evidence that market integration challenges have already been resolved. Many of the measures highlighted by the Commission still depend heavily on national implementation choices, network operator practices, permitting capacity, infrastructure readiness, and political willingness to adapt existing market structures. As has often been the case in EU energy regulation, legislative ambition and practical implementation are unlikely to develop at the same speed.

This is particularly relevant in areas such as local flexibility markets, aggregation models, energy communities, and data interoperability, where operational realities may still expose significant differences between Member States. Some markets are already relatively advanced in integrating decentralized flexibility into system operations, while others continue to rely on more traditional infrastructure-oriented approaches. As a result, the actual impact of many of the proposed measures will likely only become visible over time as implementation progresses and market participants begin testing these frameworks under real operating conditions.

Nevertheless, the broader strategic direction is becoming increasingly difficult to ignore.

The AccelerateEU Catalogue demonstrates that the Commission is progressively moving flexibility, digital coordination, decentralized participation, and infrastructure optimization toward the center of future electricity market regulation. For companies operating in or entering the energy sector, understanding these developments is becoming increasingly important because regulatory direction itself is now shaping where future market opportunities, investment incentives, and competitive advantages are likely to emerge.

In practice, the companies best positioned for the next phase of the European energy market may not necessarily be those reacting to regulation once it is fully implemented, but those capable of recognizing earlier how regulatory priorities, infrastructure planning, and market-access conditions are evolving together long before the final market structure becomes fully visible.

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The energy sector is changing faster than ever. New technology-driven companies are entering the market with ideas that would have been nearly impossible a decade ago: virtual power plants, flexibility platforms, peer-to-peer energy trading, AI-driven optimisation services, local energy communities, aggregated storage solutions, and digital infrastructure for decentralised energy markets. Yet many founders still approach their business plan as if it were simply a commercial document – a description of a product, a market opportunity, and a revenue model.

In reality, in today’s energy sector, a business plan is no longer just a business plan. It has become a regulatory strategy.

The Energy Market Is Built on Regulation

Unlike many traditional technology sectors, energy markets are fundamentally shaped by law, policy, infrastructure planning, and long-term political objectives. Market access itself is often determined not only by innovation or efficiency, but by regulatory classification, licensing structures, grid access conditions, balancing obligations, data requirements, and compliance with evolving EU energy policy.

A technically brilliant idea can fail simply because its legal and regulatory assumptions are incorrect. This is why legal analysis is no longer an optional addition to an energy-sector business plan – it is a fundamental component of it. Every serious energy business plan should include a structured assessment of:

• market access conditions,
• licensing and authorization requirements,
• regulatory barriers,
• grid connection and operational obligations,
• compliance risks,
• expected timelines
• and the project’s compatibility with both current and future regulatory frameworks.

Without this analysis, companies risk building business models that may appear commercially attractive on paper but are structurally incompatible with how electricity markets actually function. In practice, energy law analysis has become as essential as financial forecasting or market analysis.

Beyond Traditional Energy Law

The challenge is that energy regulation is no longer limited to traditional “energy law” in the narrow sense. Modern energy projects increasingly operate at the intersection of:

• electricity market law,
• digital infrastructure,
• data governance,
• cybersecurity,
• AI regulation,
• competition law,
• consumer protection,
• sustainability reporting,
• and national implementation frameworks.

At the same time, these projects are expected to align with long-term development strategies and political objectives, including decarbonization targets, grid energy systems. This means that building an energy company today requires understanding not only what is legally possible now, but also where regulation and policy are heading in the next five to ten years.

The Talent Problem Nobody Talks About

One of the biggest hidden challenges for new energy ventures is access to specialized competence. Professionals who genuinely understand both the regulatory and technical dimensions of modern electricity markets are extremely rare across Europe — especially specialists focused on new technology-based market participants and their access to electricity markets. And even when such experts exist, hiring them full-time is often unrealistic for startups or early-stage growth companies. The problem is not simply a lack of lawyers.

The sector increasingly requires people who can work across disciplines:

• legal analysis,
• market design,
• technical infrastructure,
• energy trading logic,
• policy interpretation,
• and business strategy.

Understanding how regulation affects a specific business model requires more than reading legislation. It requires the ability to interpret how technical architecture, market structures, and regulatory intent interact in practice.

A flexibility platform, for example, may face entirely different legal and operational challenges depending on whether it interacts with DSOs, aggregators, suppliers, balancing markets, or local energy communities. The regulatory implications can change significantly based on technical implementation choices alone.

From Hiring Competence to Accessing Competence

This is where the industry is beginning to shift. Instead of trying to permanently hire highly specialised expertise in an extremely narrow field, companies are increasingly moving toward project-based and objective-based cooperation models. In other words, the future is not necessarily about owning all competence internally, but about accessing the right competence at the right stage.

For many energy companies, outsourcing specialized strategic and regulatory expertise is becoming more efficient, more flexible, and significantly more realistic than building large in-house teams. This is particularly true in sectors where regulation evolves rapidly, market structures continue to change, and technological innovation moves faster than legislative adaptation.

The companies that succeed will likely not be those with the largest internal legal departments, but those capable of integrating interdisciplinary expertise into decision-making early enough.

The Future of Energy Business Planning

In the coming years, successful energy business plans will increasingly need to demonstrate more than commercial viability. They will need to show regulatory compatibility, infrastructure feasibility, scalability within evolving EU market structures, and alignment with long-term energy transition objectives.

The energy transition is no longer only a technological transformation. It is also a legal, institutional, and strategic transformation. And that changes what it means to build an energy company from the very beginning.

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