THE SCOPE OF STATE SOVEREIGNTY UNDER ARTICLE 194(2) TFEU AND THE EVOLUTION OF EU COMPETENCES IN THE ENERGY SECTOR

Abstract This article analyses the European Union's competences in the energy sector. It focuses on Article 194(2) of the Treaty on the Functioning of the European Union, which affords EU Member States the right to determine the conditions for exploiting their energy resources, the choice between different energy sources and the general structure of their energy supply. This article traces the constitutional development of EU competences in the energy sector to demonstrate the relevance of Article 194(2) TFEU in the current constitutional, international and sector-specific contexts of EU energy law. It analyses the recent case law of the Court of Justice of the European Union, which shows that the scope of Article 194(2) TFEU is considerably narrower in practice than its wording implies. The article concludes by evaluating the implications of this narrow interpretation on the future development of EU energy law and, in a broader context, on the reach of EU energy and climate policy.