Electricity imports set to spark row

Date: 31/01/02

By Laurence Frost

Under proposals by Green MEP Claude Turmes, electricity suppliers would have to show that their power had been generated in accordance with EU rules - even when it was imported from outside the bloc. Environmentalists are concerned about the sharp growth in cheaper electricity imports from central and eastern European countries.

'The reason is that they are not respecting environmental legislation that we have put into place in Europe. Much of the imported power comes from the same nuclear reactors that the EU is trying to close. Without a licensing scheme, there is an economic incentive to import electricity from dirty coal [power stations] and unsafe nuclear plants,' Turmes explained.

The European Parliament's energy committee begins debating the report next month and seeks to amend Commission proposals to open up power markets by 2005. A spokesman for industry body Eurelectric said the rules must 'ensure that plants [in candidate countries] comply with EU environmental standards'.

But the plans are likely to meet stiff resistance from the few EU power giants which have already invested in eastern European plants, including France's EdF and Germany's E.ON. Both companies have recently been involved in bidding for the Czech Republic's power utility CEZ and its distributor companies, which the government is attempting to sell off.

A spokesman for EdF said distribution complexities made it 'technically very difficult' to enforce licensing of imports according to their declared source. 'The contractual flow and the physical flow are often different,' he said.

Turmes dismisses the warning. 'These companies want to bring cheap electricity to the EU market and sell it at a big margin,' he said. The MEP is optimistic he can command cross-party support in the Parliament, where members have already called on the Commission to apply EU standards to power imports in a non-binding vote two years ago.

The Spanish EU presidency is hoping to use March's Barcelona summit to win a breakthrough deal on power liberalisation. EU energy chief Loyola de Palacio said last week the Commission would show 'flexibility' to win French agreement on electricity and gas market opening, including a possible delay in introducing competition to households.

Moves against cheap electricity imports that fail to meet EU social, environmental and safety standards are set to divide the European power industry.