20 June Energy Council

Date: 27/06/1996

AFTER eight years of wrangling, EU energy ministers finally agreed to open nearly one third of Europe's 136-billion-ecu electricity market to competition. Under the deal, competition should be introduced into the Union over a six-year period, with 22&percent; of the market being liberalised from 1997 and 33&percent; from 2003. The directive will be reviewed in 2006. A deal struck earlier this month between the EU's two heavyweights, Germany and France, who had blocked progress for almost a decade, paved the way for the wider Union agreement.

THE new regime would allow large industrial consumers who use more than 40 gigawatt hours of power annually to shop around for cheap deals from the start, a privilege which would later be extended to those who use more than 9 gigawatt hours per year.

THE deal struck at the special meeting of energy ministers, called to try to get agreement ahead of the Florence summit, is a major triumph for Energy Commissioner Christos Papoutsis, who staked his reputation as a peace-broker on clinching a deal. News of the breakthrough will, however, be greeted with horror - and possibly industrial action - by workers at the French state-owned power company Electricité de France (EdF), who have already taken to the streets in a warning strike. Energy-intensive industries, on the other hand,

will be delighted. Some 20&percent; of their production costs go towards electricity.