Ministers to set seal on gas liberalisation

Date: 07/05/1998

By Chris Johnstone

ENERGY ministers are poised to clear the way for the staged opening of European gas markets to competition, starting in 2000.

Ministers are expected to rubber-stamp the historic agreement when they meet next Monday (11 May) after the European Parliament returned their liberalisation plans unchanged.

"Parliament has made it very easy for us," said one national official. "It is the intention of the presidency to push for final adoption."

Under the deal, the biggest gas users will be allowed to shop around immediately for the cheapest supplies, with at least 20% of the market opened to competition in 2002. That target should rise to 28% after five years and 33% after ten.

The Parliament shied away from making changes to the proposals for fear of unwinding the complex and delicately balanced series of compromises which enabled ministers to reach a deal in February.

In the process, MEPs brushed off fresh calls from Europe's cogeneration lobby for amendments which would have ensured that smaller heat and power plants would not be frozen out of the cheap gas deal.

The ministerial accord gives governments the option of refusing special favours for cogeneration plants by forcing them to meet the general qualification criterion for purchasing cheap gas of consumption exceeding 25 million cubic metres a year.

However, all gas-fired power generators, irrespective of their consumption, would be free to buy the cheapest gas in countries which decided not to impose this threshold.

"We are very disappointed by the Parliament's failure to take any action," said a spokesman for Cogen Europe, the lobby for Europe's combined heat and power plants. "We will now concentrate on trying to persuade countries not to impose thresholds."

Cogen says the Parliament's refusal to back cogeneration flies in the face of its call for the European Commission to boost its target for electricity produced by combined heat and power plants from 18% to 25% of total EU production.

MEPs also decided not to raise concerns about access storage facilities for gas transportation, or to push for a clearer separation between gas transmission, distribution and supply activities within companies which provide a full package of services.