‘Third way’ for energy competition

A group of nine EU countries led by France and Germany have nearly finalised plans for a ‘third way’ approach to bring more competition to the Union’s energy markets.

Berlin and Paris are leading opposition to European Commission proposals for ‘ownership unbundling’, which would require large integrated energy companies to sell off their transmission networks to ensure the operators do not favour the companies which own them.

The group of countries is preparing a proposal which would allow energy firms to maintain ownership of transmission operators but would try to ensure that they take operational and investment decisions independently of their owners.

Under the plan, which is expected to be sent to the European Commission and other member states in time for discussion by energy ministers on 28 February, transmission network operators would have separate staff and premises from their parent companies. Managers of the network operators would be barred from working for the parent company for five years after leaving the operator, while the management board of the transmission operator would include independent members who had not worked for the parent company in the preceding five years.

The network operators would have to present investment and expansion plans every two years to the regulator and there would be a trustee, who could be the national regulator, to oversee dealings between the operator and third parties wanting access to the grid or pipelines.

France, Germany, Austria, Greece, Bulgaria, Slovakia and three others have been working on the rival proposal. They argue that their approach can achieve the level of independence that the Commission is seeking to ensure fair competition on the market without forcing large energy companies to sell off shares in the transmission businesses.

The Commission has said it is open to consider any alternatives, provided they can deliver the same degree of operational independence as ownership unbundling.

A group of nine EU countries led by France and Germany have nearly finalised plans for a ‘third way’ approach to bring more competition to the Union’s energy markets.