Regulators set energy in sights

To some eyes, the supply of energy might be considered a service of general economic interest. But rather than include energy in a directive on services of general interest, the EU has opted to set rules specific to the energy market on the balance between public service and the free market.

EU electricity and gas rules leave national governments some room to protect their markets when necessary.

Directives to open up the EU electricity and gas markets were passed in 2003 but stop short of imposing total liberalisation.

Governments may intervene to safeguard energy supplies and protect vulnerable customers.

Energy groups say that the latest rules are working well and that there is no need to treat energy as a service of general economic interest.

"The electricity industry sees absolutely no need for horizontal regulation here," said Chris Boothby of Eurelectric. "It has been clearly shown that, since liberalisation, the customer has benefited from a better service."

The European Commission is, however, less convinced that the 2003 liberalisation directives have gone to plan. "The market is not working as we wish," said a Commission energy spokesman. "We don’t see prices going down as we expected, we don’t see customers changing suppliers, there are still not enough cross-border energy supplies."

The Commission is now considering various ways of improving the internal market, but the spokesman said a framework on services of general economic interest was not one of them.

A discussion paper on the EU energy market, published in March, suggests changes including an EU energy regulator and new energy legislation.

To follow this, a review of the 2003 rules will be published in January, along with a review of the EU energy infrastructure, and an energy grid interconnection plan.

The results of an inquiry into energy companies by the Commission’s competition department are also due early next year.

To some eyes, the supply of energy might be considered a service of general economic interest. But rather than include energy in a directive on services of general interest, the EU has opted to set rules specific to the energy market on the balance between public service and the free market.