EU regulators launch regional electricity markets

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Published 28 February 2006, updated 04 June 2012

Tags

energy liberalisation

National energy regulators have launched an initiative to create seven regional markets as a first step towards a single EU market for electricity. The Commission seems to favour a more integrated approach.

The European Regulators' Group for electricity and gas (ERGEG) agreed on 27 February to launch an initiative that will seek to create seven mini electricity markets within the EU in order to remove barriers to cross-border trade in those regions.

The group, which acts mainly as an advisory body to the European Commission, says the initiative supports EU energy liberalisation objectives as it will remove bottlenecks between countries as a first step towards the completion of a single EU market for electricity.

EREG says each group will tackle "in a practical way" key issues such as interconnection between countries through a series of Regional Energy Market projects (REMs). The projects should bring the benefits of liberalisation to electricity consumers across Europe "in the form of competitive prices, secure supplies, innovation and choice" in an EU market which is still largely national, EREG said. The seven regions are defined in the following way:

Region	Countries	Lead Regulator
Central-West	Belgium, France, Germany, Luxembourg, Netherlands	Belgium
Northern	Denmark, Finland, Germany, Norway, Poland, Sweden	Denmark
UK and Ireland	France, Republic of Ireland, UK	UK
Central-South	Austria, France, Germany, Greece, Italy, Slovenia	Italy
South-West	France, Portugal, Spain	Spain
Central-East	Austria, Czech Republic, Germany, Hungary, Poland, Slovakia, Slovenia	Austria
Baltic	Estonia, Latvia, Lithuania	Latvia

Positions:

ERGEG Chairman Sir John Mogg said: "We are currently seeing major strategic policy from the Commission and the Council designed to deliver a competitive liberalized single European market across an integrated European grid. Our Electricity Regional Initiative is entirely consistent with this and will help by making progress at a practical level in the seven European electricity regional markets that are targeted".

The creation of smaller-scale regional energy markets within the EU is received with some degree of scepticism at the European Commission. "What Europe needs is a more integrated approach [to energy policy]" said Commission spokesperson Johannes Laitenberger on 27 February. "It is not with 25 mini energy markets that Europe will successfully be able to meet the globalisation challenge".

Laitenberger said a Green Paper due to be launched on 8 March will go into more detail about the Commission's intentions on further energy liberalisation. An early draft of the paper, seen by EurActiv, proposes to aim for a single European electricity grid by harmonising grid rules and defining route-by-route electricity interconnection plans.

In the long run, the Commission sees the powers of national energy regulators streamlined and EREG replaced by a new community body over which it would have better control, the European Energy Regulatory Agency.

France, Germany and the Benelux countries were the first to decide on a regional energy imitative last year with the launch of a forum on interconnection and security of supply.

Next steps:

May 2006: similar regional gas initiative due to be finalised
Autumn 2006: first progress report on the seven regional electricity markets
July 2007: household gas and electricity market opens up to competition

External Links

European Union

European Regulators' Group (EREG):Electricity Regional Initiative Launched to Accelerate Single European Energy Market
European Regulators' Group (EREG):Fact sheet - The Electricity Regional Initiative

Governments

France - Ministre Délégué à l'Industrie:Forum de l’énergie sur les interconnexions et la sécurité d’approvisionnement(1 Dec. 2005)

Background:

The EU single market for gas and electricity is due to be completed next year with the household market opening up to competition in July 2007. Industrial consumers have in theory been able to choose their supplier since July 2004.

However, the preliminary findings of a Commission inquiry already uncovered some "serious malfunctions" in the liberalised market for industrial consumers, saying the markets remained largely national and lacked competition. At a recent public presentation, competition Commissioner Neelie Kroes announced that she will launch a series of individual antitrust investigations that will presumably target former national monopolies (EurActiv, 17 Feb. 2006).