Dismay over presidency’s new gas proposals

Date: 04/09/1997

CAMPAIGNERS for more efficient and environment-friendly power generation are seeking urgent changes to the latest proposals to open up the EU's gas supply to competition.

COGEN Europe, the Brussels-based lobby for combined heat and power generation, has reacted with dismay to the latest Luxembourg presidency proposals for gas liberalisation, and is seeking changes to the text before national experts meet to discuss the plan next Monday (8 September).

The Luxembourg text sets a high threshold for power plants to qualify as 'eligible customers' able to shop around for the cheapest gas supplies. These thresholds would automatically exclude most cogeneration plants which are mainly small consumers and close to their final users.

This is a complete turn around from the previous Dutch presidency proposal which made a specific effort to ensure that cogeneration plants would benefit from the start of a liberalised gas market. The Dutch specifically wrote cogeneration into its market-opening proposal even though the move angered Denmark.

Luxembourg is also out of step with the Commission's own proposals to boost cogeneration, to be released in October, and the EU's attempts to set an example to the rest of the world in using energy more efficiently and tackling climate change.

Ironically, the Danish concerns appear to have been appeased by the latest Luxembourg text. Denmark, which leads the rest of Europe in promoting cogeneration, was worried that allowing cogeneration plants to shop around for supplies would have opened up too much of its domestic gas market to competition in the initial stages of liberalisation.

That concern has been answered by a safeguard clause which allows countries to redefine eligible customers if more than 35&percent; of their home market is exposed to competition in the first stage of liberalisation. This would leave them free to push the market opening below the 35&percent; level. Copenhagen has said it is satisfied with this formula.

Spain is identified by Cogen as the culprit which has forced Luxembourg to draft its gas consumption threshold at 25 million cubic metres a year in a way which excludes cogeneration from liberalisation.

Luxembourg has set its sights on finalising a deal to open the European gas market during its term as the EU's agenda setter.

However, its predecessors in the post have already found that they must reconcile the demands of those countries which want a fast and ambitious liberalisation of the market with those wishing to put on the brakes.