Commission vows to press on with energy plans

The European Commission has said that it will press ahead with plans to loosen energy generators’ control over distribution networks despite French claims that a new energy-sector giant was "a vision for EU energy policy".

French state secretary for Europe Jean-Pierre Jouyet said in Strasbourg this week that the recently revised merger of Suez and Gaz de France, creating the world’s fourth largest energy utility, was "a vision of what could be the energy policy for Europe".

Jouyet rejected the Commission’s plan, to be published on 19 September, to force energy firms to sell off transmission and distribution networks or abandon control over their operations and investment decisions. "It is not an ownership problem. A regulator that guarantees fair access to the market is a good method," he said.

A spokesman for Andris Piebalgs, European energy commissioner, said that the Commission believed strong regulation was necessary. "The Commission will propose measures to ensure substantially increased powers and independence of regulators," the spokesman added. The French government retains significant powers in the energy sector and the national regulator can only make recommendations on issues like prices.

The spokesman said that the Commission was convinced that the EU needed "new measures on unbundling" to provide access to the network. The sectoral inquiry by Competition Commissioner Neelie Kroes had shown that "something has to be done to ensure real separation between generation and distribution of energy", he said.

The spokesman played down suggestions that consolidation undermined efforts to bring more competition into the sector. He pointed out that greater competition in other markets such as airlines had led both to consoli-dation and mergers as well as the arrival of new entrants such as low-cost carrier Ryanair.

Russia has reacted angrily to reports that the Commission will introduce measures to stop companies such as Gazprom from buying up EU energy companies. A spokesman for the Kremlin called the EU’s plan "hysterical" and warned Russia would use "any legal means at its disposal" to ensure equal access to markets for its companies.

The European Commission has said that it will press ahead with plans to loosen energy generators’ control over distribution networks despite French claims that a new energy-sector giant was "a vision for EU energy policy".