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EU energy market talks edge forward

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Published 19 February 2009

Deadlocked talks between the EU institutions on the third energy market liberalisation package took a step forward yesterday (18 February), as the Czech EU Presidency tabled amendments to the Council's position on ownership unbundling.

MEPs involved in the different proposals under discussion told journalists today (19 February) that the atmosphere was "constructive", in marked contrast to previous meetings. 

"I think [the Council] got the message that we were unhappy. The Czech Presidency has responded by moving a little on the issue of unbundling and suggested some changes to the common position," said Socialist MEP Eluned Morgan (UK), the Parliament's rapporteur on the electricity internal market.

Morgan said MEPs are worried that the amendments represent a Czech government position rather than the views of the Council as a whole. "We expect the Council to back up the efforts of the presidency," she said.

The MEP praised the Czechs for taking a "brave stance". "This has allowed us to continue with the negotiations," she said, revealing that the Parliament delegation would have been prepared to walk out of the talks had there been no movement (EurActiv 12/02/09).

Nevertheless, Czech Presidency sources said the proposed changes are only minor. No "substantial change" to the co-legislators' position is to be expected, as this would be rejected by the member states, they said.

Separation of energy companies' generation and transmission assets ('ownership unbundling') remains the biggest stumbling block, with the Parliament insisting on full unbundling for electricity and a third option, involving a strong independent transmission operator, for gas. But the Council, under pressure from France, maintains that the third option should apply to both gas and electricity.

The Council made progress on "cooling-off periods" for energy company executives, Morgan said. The Council originally suggested that directors should have a six-month break when moving from one part of a vertically-integrated company to another, and that top managers should have a break of around three years. But Morgan said the Council is now willing to be flexible.

MEPs were also pleased with progress made in talks on the future powers and duties of national regulatory authorities, Morgan said. 

Bulgarian Socialist MEP Atanas Paparizov, the Parliament's rapporteur on conditions for access to the natural gas transmission network, expressed optimism that the Council's position on a ten-year investment plan would change. The Parliament wants to make the plan obligatory, while the Council and the Commission are both in favour of a voluntary plan.

"After our discussions at the last meeting and yesterday, it was confirmed that the plan would become some type of a benchmark and that the national regulators who analyse the plans of each company may make recommendations to them if they are not implementing the ten-year investment plan as adopted," Paparizov stated. 

The EU's co-legislators are pressed for time if they want to close the deal before the end of the current parliamentary session. Both MEPs and the Czech Presidency nevertheless declared that they had every confidence that the task could be completed. 

Positions: 

Socialist MEP Eluned Morgan (UK), the Parliament's rapporteur on the electricity internal market, urged other governments to follow the example of the Czech Republic: "Because of the brave stance taken by the Czechs, we hope that the rest of the member states will understand that if they want a deal on this, there will have to be movement from the Council's common position that was agreed last June."

Giles Chichester MEP (EPP-ED, UK), the Parliament's rapporteur on establishing an agency for cooperation between energy regulators, emphasised the importance coordinating national regulatory Authorities at european level to ensure "consistent regulation" across European market. "There are signs of encouraging flexibility from the Council. I make a list of about nine areas where they appear to have taken on board our concerns in this area. The bad news is that there are about fifteen points that they have not included."

Bulgarian Socialist MEP Atanas Paparizov, the Parliament's rapporteur on conditions for access to the natural gas transmission network,  described the Council's change of attitude towards the ten-year investment plan as "a positive compromise," ensuring an "atmosphere of predictability for investments" and an enhanced role for national regulators, without necessarily making the plan legally binding.

Next steps: 
  • 31 March: Vote in the Parliament's Industry, Research and Energy Committee.
  • April: Plenary vote.
Background: 

On 19 September 2007, the Commission presented its proposals for a 'third package' of proposals to further liberalise the EU's energy market (see EurActiv LinksDossier).

The proposals sparked much controversy, particularly over the issue of 'ownership unbundling', meaning the break-up of large vertically-integrated energy firms like EDF and E.ON, which simultaneously control electricity production and distribution assets.

France, Germany and six other member states led resistance to the unbundling plans. Together, they tabled an alternative proposal in February 2008, which they argue would guarantee a similar result without forcing energy firms to split their energy production and transmission businesses (EurActiv 01/02/08).

Energy ministers finally clinched a deal on the Council's position on 10 November 2008, which nevertheless forbids energy producers from buying up the transmission businesses of energy companies in European countries where full unbundling has been introduced (EurActiv 13/10/08).

The Council's position is still far removed from the Parliament's insistence on full unbundling, and the trialogue negotiations that started between the institutions in January 2009 have made minimal progress so far.

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