MEPs back plans to liberalize energy markets across the EU

Date: 05/06/03

By Martin Banks

THE prospect of cheaper gas and electricity for millions of people across Europe has come a step closer after MEPs this week approved proposals aimed at opening up EU energy markets to full competition by the end of the decade.

Under plans endorsed by the Parliament on Wednesday (4 June), the EU will liberalize the energy markets by July 2004 - for all commercial customers - and July 2007 for all householders.

An agreement to subject nuclear power firms to rigorous competition laws paved the way for deputies meeting in Strasbourg to approve the energy liberalization package.

It had been previously held up by concerns that nuclear decommissioning funds were being used as unfair subsidies to electricity companies in countries such as Germany and France, at a cost to unsubsidized companies in other countries.

Luxembourg Green MEP Claude Turmes, Parliament's rapporteur on the European Commission's electricity directive, said Wednesday's vote brought to an end a three-year legislative struggle.

Turmes said: "One market with one competition policy is what is needed to transform Europe into a competitive and innovative energy market.

"The fact that France and Germany accept that decommissioning funds are fully subject to the scrutiny of EU competition law is a major setback for the pro-nuclear proponents," Turmes added.

His views were echoed by UK Liberal deputy Nick Clegg: "This agreement marks a hard fought victory for those who demand transparency, fair competition and full accountability in the use of taxpayers' money and will allow the EU to push ahead to complete the liberalization of the energy markets.

"The vote was a tremendous shot in the arm for the Lisbon agenda. Amid continued concerns that the EU is behind schedule in its aim to become the most dynamic world economy by 2010, we can point to this energy package as a striking advance."

The gas and electricity markets are already liberalized to a large degree - which varies from country to country - but they remain essentially national.

The electricity markets have been opened 100 in the UK, Finland, Germany and Sweden, but by less than one third in France, Belgium, Austria, Greece, Ireland and Portugal. The UK and Germany are the only member states to have opened up their markets for gas.

The proposals endorsed by MEPs this week aim to promote easier access to cross-border electricity networks and to ensure that, by 2007, all consumers can choose their gas and electricity suppliers freely.

The Commission is to present a review in 2006 of the first two years of its energy liberalization proposals.

MEPs have approved proposals for the liberalisation of the EU's energy markets by the end of the decade.