Principal, The Brattle Group, UK

Track D, Keynote Session 3

SHORT BIOGRAPHY
Mr. Lapuerta directs the London office of The Brattle Group, an international consultancy specialising in the economic and financial analysis of the energy industry. He has advised gas and power companies, regulators and governments on the economic and financial issues concerning regulation and the development of competition in European energy markets. Clients have included the European Commission and the governments or energy regulators of Austria, Belgium, Greece, Ireland, Italy, the Netherlands and the United Kingdom, as well as the Council of European Energy Regulators and the European Federation of Energy Traders. Mr. Lapuerta has degrees in law and economics from Harvard University.

ABSTRACT SUMMARY

"The Financial Crisis and the Regulation of Energy Markets "

The financial crisis has reduced demand for natural gas and electricity throughout Europe while simultaneously raising the need for new infrastructure that can transport these products, to mitigate the emergence of local and regional imbalances. An emerging Spanish gas surplus gives higher value and urgency to the expansion of the Spanish-French gas pipeline and to regassification capacity elsewhere in Europe. Generally, infrastructure investment can still reduce total energy costs in difficult economic times.
The financial crisis has simultaneously complicated the regulators’ tasks of estimating reasonable returns for regulated infrastructure. In the presentation, I will discuss two logical solutions: a) depart from traditional techniques for estimating the cost of capital, b) reduce the amount of infrastructure subject to the regulator’s estimates of the cost of capital, either by using innovative tendering techniques to finance new infrastructure or by facilitating the construction of new infrastructure under exemptions from regulated third-party access requirements.