EC to open energy market to more competition

19 September 2007 15:29  [Source: ICIS news]

PARIS (ICIS news)--The European Commission (EC) adopted plans on Wednesday that will subject European energy markets to greater competition and force the main players to separate power generation businesses from their transmission networks.

 

The proposals seek to “unbundle” energy supply and networks by forcing energy giants such as Germany's E.ON and Electricite de France (EDF) to sell their transmission networks or hand over control to an independent operator.

 

The EC argues this will boost investment in infrastructure and allow new entrants into the sector.

 

The package will provide “a competitive energy gas and electricity market” that will offer “a common European response to combat climate change, achieve greater energy security and provide abundant energy at a fair price for citizens,” said EC president Jose Manuel Barroso.

 

Non-European utilities will have to prove they comply with European rules and regulations before being allowed to purchase significant stakes in EU energy networks.

 

The EU's energy import dependence is expected to jump from 50% of total energy consumption today to 65% in 2030, according to the EC.

 

“External suppliers are vital to our energy future,” admitted Barroso, claiming that Wednesday’s measures were about “protecting the openness of our market [and] the benefits that unbundling will bring”.

 

“This is about fairness; it is about protecting fair competition,” he added. “It is not about protectionism.”

 

Russia's Gazprom is unlikely to support any measure that may reduce its share of the EU energy market.

 

Chief spokesman Sergei Kupriyanov said Gazprom would be “studying very carefully the energy package and consulting with the relevant EU bodies” before “presenting its evaluation of the way these measures will affect security of supply, the competitiveness of European energy markets and, finally, energy prices in Europe”.

 

The European Chemical Industry Council (Cefic) welcomed the proposals, but called for further measures to stop key players dominating the market.

 

“Concrete measures to reduce the level of market concentration should be included in the legislation,” said Cefic director-general Alain Perroy.

 

“These can take the form of measures to optimise the use of electricity grids and gas pipelines or the facilitation of new entrant investments.”

 

By: Philippa Jones
+44 20 8652 3214

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