Full power ahead for energy market liberalisation

Date: 22/02/01

By Renée Cordes

THE EU executive is about to put electricity and gas liberalisation on the front burner.

Although there are already Union-wide laws in place requiring member states to open up these precious sectors to rivals, in truth there are still 15 separate markets rather than a well-functioning whole.

If all goes according to plan, this will soon change.

Early next month, the European Commission will adopt proposals calling for the full opening of the gas and electricity markets to all consumers by 2005.

Markets for industrial consumers are to be opened even earlier - 2003 for electricity and 2004 for gas.

"I believe the European Union is on the right track in restructuring its electricity and gas sectors," Energy Commissioner Loyola De Palacio told the World Economic Forum in Davos last month. "For this reason, the Commission will propose shortly additional measures, leading to truly integrated markets which will benefit all consumers."

The ambitious package will call for a system of published and regulated tariffs approved by an independent authority and for the company operating the transmission network to be completely separate from production and sales.

While it may take a while for these new rules to be put into place, De Palacio continues to rely on help from her competition counterpart, Mario Monti.

In a recent example, his team attached tough conditions to Electricité de France's planned purchase of a stake in German electricity firm Energie Baden-Württemberg AG. EdF was ordered to make available to rivals 6,000 megawatts of generation capacity in France, or 30% of the market.

Early in March 2001, the European Commission will adopt proposals calling for the full opening of the gas and electricity markets to all consumers by 2005. Markets for industrial consumers are to be opened even earlier - 2003 for electricity and 2004 for gas.