The European Commission wants to enforce the EU's single energy market laws "as a matter of priority", according to a draft communication that states the EU Executive's determination to create a barrier-free market-place, which has angered dominant gas supplier Russia.
Early this month, the Commission announced it had opened an investigation into suspected anti-competitive market practices by Russia's Gazprom.
Speaking on Friday (14 September) in Lithuania, which totally depends on Russia for its gas, Energy Commissioner Günther Oettinger said Russia had to abide by the EU's internal market rules and stop offering widely varying prices.
EU set to miss 2014 implementation deadline
Within the 27-member bloc, the Commission aims to complete by 2014 a single energy market to encourage the equitable flow of power and gas across borders, which it says will stimulate fair competition and could save consumers billions.
But in a draft communication on "making the internal energy market work," the Commission states the EU is not on track to meet that 2014 deadline.
The Commission document says the "building blocks are there" however, referring in particular to the Third Energy Package, one of whose main requirements is that companies, such as Gazprom and EDF, that control energy supplies should not dominate the distribution networks as well when operating in the EU.
"Delays in implementation are not acceptable," the text states, noting that in seven member states, more than 80% of the power generation is still controlled by the historic incumbent and not open enough to newcomers.
"The Commission is pursuing, as a matter of priority, infringement procedures against those member states that have not transposed the third energy package directives yet or have failed to do so correctly."
"Not only do member states need to implement all legislation fully, they also need to move away from and resist the call for inward-looking or nationally-inspired policy making which prevents the internal market from working effectively," it said.
A more competitive, greener Europe
The Commission argues the single energy market is not an end in itself, but a means to create a more reliable, better value EU energy system and accelerate progress towards decarbonisation.
In general, it says, energy markets are not seen to be sufficiently transparent and open and are in danger of being driven by subsidies rather than market considerations.
More open markets can have huge benefits for consumers facing economic difficulties, it says, citing estimates they could save up to €13 billion per year across the bloc if they switched to the cheapest available electricity tariff.
Switching rates are already high in Britain, the Czech Republic and Sweden, it said.
Apart from taking action against member states, which could lead to cases at the European Court of Justice and heavy fines, the Commission is proposing an action plan.
Measures suggested include phasing out regulated prices, analysing use of subsidies and acting to protect vulnerable customers.
The Commission routinely declines comment on unpublished drafts.
To complete the internal energy market, a third package of gas and electricity directives was adopted in 2009, including 'unbundling' guidelines requiring energy transmission networks to run independently from the production and supply side.
A compromise allowed former state monopolies such as EDF or GDF in France and E.ON or RWE in Germany to retain ownership of their gas and electricity grids.
However, their management had to be passed to an independent subsidiary, the transmission system operator (TSO), which had "the power to independently adopt its annual investment plan and to raise money on the capital market, in particular through borrowing and capital increase".
- The European Commission is expected to publish the communication in the coming weeks.