Energy ministers look for a deal in new year

Date: 28/11/1996

DIVISIONS between member states over how to open Europe's gas industry to competition have been narrowed down to the key issues of market access and exclusive supply deals.

With their officials unable to make significant headway, energy ministers have asked to debate these issues themselves when they meet next Tuesday (3 December) in an attempt to close the gaps between France and Belgium, on the one hand, and the UK and the Netherlands on the other.

Dublin hopes it will then be able to draft a set of conclusions which will make a gas liberalisation deal possible under the Dutch EU presidency in the first half of next year.

In a push to get the talks rolling, Irish officials have already put together a compromise proposal which would allow member states to choose which kind of liberalisation model to adopt - either opting for a system where producers, suppliers and customers negotiate the price of access to networks on a case-by-case basis, or for a regulated model where both transmission and distribution charges are published up front.

Ministers will try to narrow their differences at next week's meeting over how to treat the long-term 'take or pay' contracts of up to 30 years which dom-inate the industry.

The Irish compromise would make it possible for firms to ask for more time to liberalise their markets if they were locked into long-term contracts while, at the same time, experiencing a run-down in domestic demand for gas. Member states could find room for compromise if the take or pay contracts were kept flexible both in terms of the volumes of gas to be taken and the price paid, so that tariff reductions could be passed on to consumers.

Ministers will also give their views on the extent to which the market should be opened and define the size of companies entitled to shop around for gas.

Meanwhile, the electricity liberalisation directive has little chance of coming into force on schedule due to delays in the European Parliament.

The law, which aims to open a quarter of the EU's electricity market to competition from 1999 onwards, was due to come into effect from January, allowing two full years for it to be put on to national statute books.

But the Parliament's energy committee has adopted amendments to the directive - including common rules to harmonise “environmental protection, safety and social protection of workers on the basis of the highest possible standards” - which some member states will simply be unable to accept.

MEPs will now hold talks with energy ministers, their officials and the Commission to try to strike a compromise.