The Analysis Method

The analysis method that will be used in this research is an analytical case study examining known examples of interaction between the EC and NRAs at the level of the ENER. This represents, fundamentally, a comparative policy analysis, in which policies across two different institutional regimes are compared in order to generate a theoretical understanding of a particular situation (Radaelli et al., 2012).

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The goal of the research is to define a causal mechanism (ENER engagement) for a specific outcome (increased competition), while still taking into account the contextual influences of two distinct levels of interaction. This model is defined in the section above.

We have chosen to perform a qualitative, analytical comparative case study between two states because of the potential limitations on quantitative analysis to lend insight into the relationships and operations of institutions (Scharpf, 2000). The role of context in causal analysis is particularly important in political analysis because it has an interaction effect that needs to be considered, and that should be integrated into the analysis process (Faletti & Lynch, 2009). The comparative case study cannot perform all the work of hypothesis proving, outside conditions where external conditions can be strictly controlled (Scharpf, 2000). This level of control is not possible in this instance, but the comparative case study can still provide valuable information about deviations as well as shared conditions within the framework. The case study can serve a number of purposes, including the development of a theoretical or working model for decision-making as well as potential extrapolation to other environments (Barzelay, 2007). In this case, we have focused only on the causal mechanisms in play, drawing on government, institution, and journalistic sources as well as previous research and evidence to show the causal mechanisms of the policy-making model described above in play.

There are, as Radaelli et al. (2012) pointed out, some particular challenges in comparative policy analysis that can emerge, such as institutional determinism and unfounded conjecture. By focusing on a non-deterministic policy-making model and using case studies of real energy industry regulatory situations, we avoid these problems, but we do recognize that they are a fundamental element of our research process. While quantitative approaches, as in econometric comparison of product-market regulation and competition within the EU, have been performed previously (Conway & Nicoletti, 2006), and have added useful information, we do not consider this to be an appropriate approach because it cannot take into account the context of the research. Thus, the comparative policy case study has been selected, and the research design and analysis has been approached carefully to avoid the potential pitfalls of conjecture or determinism.

168 5. Case Studies

Case studies serve as microcosms for broader, global phenomena, with the methodology viable in making critical connections between single cases and the larger, environmental context in which these cases exist. The fortitude of case study research lies in the applicability of the cases to the phenomena being examined as well as the methodological design. The case studies selected for the qualitative analysis were chosen for their applicability to the two variables, namely ENER intervention as well as enhanced competition. However, the greatest relevance of these cases to this present inquiry is the diversity of the independent variables between the two cases. The nature of the energy sector, with its dynamic trade relationships and increasingly weighted influence on multiple dimensions of the global marketplace, warrants that diverse case studies be explored in order to draw conclusions regarding the impact of ENER intervention on energy competition.

Grounding the case study selection, by extension, is the assumption that universal solutions to energy regulation and competition are neither viable nor sustainable in the global economy, as the gaps between supranational and domestic regulation vary between nation- states. The case studies addressed using the policy-making model outlined above include the Czech Republic and Spain. The Czech Republic discussion focuses on the harmonization of national requirements with CEER in the electricity and gas sectors. In Spain, the gas and electricity sectors and their relationship to ACER is the focus of discussion. The focus of these case studies is on the accountability, transparency, and independence of the ENERs and the resulting competition. In both cases, the ENER‘s focus on these three norms increased the available resources of the NRA and allowed them to reduce incumbent power and government support, expanding the focus on the consumer interests the NRA represents at the domestic level.

The divergence between the Czech Republic‘s emphasis on national requirements and Spain‘s focus on its relationship to the ENER represents a critical distinction that is essential to this analysis, with the conversely similar focus on the gas and electricity sectors in both nations providing a strong mechanism for comparison. The variability between the case studies is sufficient enough to derive flexible and globally applicable conclusions from the analysis, with the similarities

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between the cases concurrently necessary in order to forge meaningful connections between the case itself, energy competition, and ENER intervention. In short, the generalizability of the study is inextricably bound to the relevance of the Czech and Spanish case to the need for boosted energy competition throughout the EU.