Energy sector faces race to catch up

Date: 15/06/2000

By Renée Cordes

BEFORE joining the EU, would-be member states will have to introduce laws to ensure they comply with the Union's gas and electricity directives.

This legislation foresees a gradual opening of both markets, with 20% of the natural gas sector to be liberalised from August this year and at least a third within a decade. Electricity is on a faster track - most of the Union's 15 member states have already put the liberalisation directive onto national statute books.

European Commission officials stress that although some of the applicant countries may be given extra time to implement this legislation in full, this will be the exception rather than the rule.

Many of the 'first-wave' countries have begun adjusting their legislation accordingly. But critics warn that the new kids on the block will have to run much faster than those already in the race, as they are lagging well behind in fulfilling the basic tenets of EU energy policy: to ensure security of supply and provide environmentally-friendly power at a low cost.

Most central and eastern European countries are looking to investors from the West to provide the funding needed to end their reliance on economically unviable and polluting energy sources. "If you look at the first wave of countries, the Czech Republic and Poland face the biggest problems with rather antiquated energy systems," said Stephan Singer, of the World Wide Fund for Nature.

But the situation is already beginning to change throughout the region, with demand for coal in Poland declining and several large US firms gearing up to modernise Estonia's dirty shale oil facilities.

Hooking up the Baltic states to the EU's electricity grid will, however, be more difficult as Estonia, Lithuania and Latvia do not yet have a physical link to existing member states.

Before joining the EU, would-be member states will have to introduce laws to ensure they comply with the Union's gas and electricity directives.