Barroso rallies support for EU energy overhaul

European Commission President José Manuel Barroso has called on the EU’s national governments to rally to his plans for a common energy policy. Unveiling the Commission’s energy strategy yesterday (10 January), Barroso raised the stakes ahead of March’s European Council, saying that the support of the member states was vital.

He said that the Commission would not make legislative proposals until after the Council had given a response.

Barroso said: "We need to know if there is a sufficient consensus within the Council. Otherwise the chances of it [our plans] being adopted are almost zero."

He dismissed suggestions that, in presenting options, the Commission was failing to use its right of initiative to put forward legislation. "If we don’t have the member states with us we will not have a common energy policy," he said, adding: "I believe in a partnership with the Council. The other way would be to run into the wall."

In a package of ten reports to be submitted to EU leaders for discussion at their summit in Brussels on 8-9 March, the Commission has set out its strategy for responding to the challenge of climate change, achieving greater energy security and providing energy at competitive prices for citizens and businesses.

Ahead of the summit, the package will be discussed by the ministers for foreign affairs, energy and the environment over the next six weeks.

Barroso set out a number of key targets for the EU including a 20% cut in greenhouse emissions by 2020 (compared to 1990 levels), obtaining 20% of energy from renewable sources and raising the share of biofuels in energy production to 10% by the same date.

Barroso said that Europe should "embrace a low carbon future" having left behind "our coal-based industrial past".

The package has three main elements: achieving a competitive energy market, accelerating the shift to a low carbon economy and boosting energy efficiency.

Barroso has avoided a direct confrontation with France and Germany by leaving it to member states to express their preference on how to ensure a competitive energy market.

There was a clear majority of commissioners in Wednesday’s meeting in favour of unbundling the ownership of energy companies. But German Chancellor Angela Merkel and French President Jacques Chirac have told Barroso that forced splitting up of energy firms through ownership unbundling is unacceptable for giants like Germany’s E.ON, RWE and EnBW and France’s EdF and GdF.

The Commission is prepared to countenance an alternative path but is warning that if governments do not accept ownership unbundling they will face highly intrusive and bureaucratic regulation of energy companies by independent system operators (ISOs), to ensure that companies do not abuse their positions. An ISO would manage transmission and distribution independently of the generation company - even though it may have the same owner.

In one of its reports the Commission says: "The independent system operator approach would improve the status quo but would require more detailed, prescriptive and costly regulation and would be less effective in addressing the disincentives to invest in networks".

Germany’s state secretary for economic affairs Joachim Wuermeling said on Wednesday: "We don’t see any need for ownership unbundling. We think the current rules [for legal unbundling] need to be better applied."

But he backed the Commission’s call for stronger powers for regulators. "New rules are necessary on strengthening the powers of national regulators and co-operation between regulators at EU level", he said, adding that there should be harmonisation of technical standards because the "Europe-wide [electricity] grid is not working".

European Commission President José Manuel Barroso has called on the EU’s national governments to rally to his plans for a common energy policy. Unveiling the Commission’s energy strategy yesterday (10 January), Barroso raised the stakes ahead of March’s European Council, saying that the support of the member states was vital.