After two years of long negotiations, the European Parliament passed at its second reading on June 4 the bill to fully open the European energy markets in the course of the next few years. Adoption by the Council of Ministers is expected to follow during the coming weeks. The package constitutes a radical change of direction and is intended to put a stop to the asymmetries and distortions of competition observed in recent years. It is, according to EC vice-president and energy commissioner Loyola de Palacio, a ‘genuine revolution’.

Its targets are full opening of the gas and electricity markets for the commercial sector by 2004, and of the gas and electricity markets for domestic consumers by 2007. For the first time, individual consumers and companies, rather than just big industrial customers, will be able to shop around for electricity and gas supplies.

The bill, based on a Commission proposal of March 2001, also seeks to strengthen public service obligations and security of supply. Markets will be opened by establishing independent regulatory functions and separating transmission and distribution functions from generation and the provision of services.

A second vote put in place a fundamental complement to the opening up of Europe, namely a plan for a trans-European energy network, (TEN-E) designed to end the isolation of certain European markets by promoting interconnection, interoperability and access to the networks.

The objective is to achieve 10 per cent electricity interconnection capacity between member states.