European Commission president José Manuel Barroso has described an agreement reached by EU Energy Ministers on electricity and gas market liberalisation as “a crucial step towards the completion of the single market”.
Ministers have reached agreement on the European Commission’s legislative package after several months of discussion and a month-long deadlock over contentious issues such as ownership unbundling, investment by non-EU companies and the creation of an EU regulatory agency.
Several elements of the package are weakened versions of the Commission’s original proposal. However, President Barroso hailed the agreement as “extremely good news for consumers and businesses in Europe”.
The legislation has yet to be approved by the European Parliament but will mean clearer investment conditions for new power plants and transmission networks, increased security of supply and a more open, competitive market, according to the Commission.
Energy Commissioner Andris Piebalgs said: “I am pleased that Member States are supporting the Commission’s drive to create a real internal energy market. The internal market is essential to deliver all three of Europe’s energy objectives: a competitive European economy, security of energy supply and sustainability.”
The legislative package, originally proposed in September 2007, aims to implement a complete internal energy market with open competition and effective regulation.
Under the deal, large vertically integrated utilities can retain ownership of their high voltage transmission assets provided that their operation is carried out by an independent subsidiary. The Commission had originally proposed full ownership unbundling of transmission assets in order to limit the market power of large national energy majors such as EDF.
However, following pressure from countries such as Spain, Poland and the Netherlands, energy producers will not be able to buy transmission assets in countries where full unbundling has already been introduced.
Ministers approved a weakened version of the so-called ‘Gazprom Clause’. Non-EU energy companies will now be able to invest in EU energy assets provided that a bilateral political agreement is in place between the two governments in question.
This represents a victory for Germany, which sources around 40 per cent of gas imports from Russia and which was opposed to the Commission’s original proposal.
The Commission had sought to prevent non-EU companies from investing heavily in EU energy assets in order to improve energy security. It was also concerned over the effects on competition of involvement in the market by large, state-owned companies such as Gazprom.
Energy Ministers have also agreed on the voting system for the new EU Agency for the Co-operation of Energy Regulators, which will oversee the functioning of the energy markets. All EU countries will have equal voting rights in the Agency’s decisions, although Germany had pushed for larger countries to have a greater say.
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