Brussels encouraged by RWE grid sale

German utility firm RWE AG has announced it will sell off its gas grid within two years to avoid further anti-trust actions by Brussels over suspected abuse of market dominance. The move comes one week before a key ministerial meeting on energy liberalisation. 

RWE, Germany’s second largest electricity producer, says it wants to avoid “protracted litigation” and has therefore “decided in favour of a consensual settlement and would like to end the proceedings”. 

“The intended agreement is not an acknowledgement of guilt,” RWE said in a 31 May press statement. 

The Commission, which proposed its ‘third package’ of energy market liberalisation measures on 19 September 2007, is intent on further liberalising the EU’s gas and electricity markets by ‘unbundling’, or separating, the production and distribution assets of large energy firms. 

RWE’s grid sell-off is likely to be considered a further victory for the EU executive, following a similar move by German energy giant E.ON in February (EURACTIV 29/02/08). 

The Commission welcomed the RWE announcement as “a structural change in the German gas sector” that, if implemented, will “facilitate competition in the sector to the benefit of domestic and industrial gas customers,” according to a 31 May statement.

A deal in sight?

Meanwhile EU energy ministers are preparing to meet in Luxembourg on 6 June to discuss the third package, but it remains unclear if the meeting will produce a political agreement that could pave the way for speedy resolution of the file. 

A “compromise is in everyone’s interest at this stage,” Commission energy spokesperson Ferran Tarradellas told EURACTIV. And there have been signs of a possible deal between Brussels and the eight member states based on a compromise proposal elaborated jointly by the Commission and the Slovenian EU Presidency (EURACTIV 16/05/08). 

But the Presidency/Commission paper is only one among several options on the table, and the last meeting of experts in the Committee of Permanent Representations (COREPER) is scheduled just days before the Council. “It’s a mess,” said Tarradellas, who does not preclude the possibility that ministers may fail to reach a deal on Friday.

In this context, the RWE announcement will not have “no influence” on the Council negotiations, EU Energy Commissioner Andris Piebalgs said on 30 May.

Market movement 

Nonetheless, the Commission was encouraged last week by two separate developments in the EU energy sector that point to a greater opening of the market in line with Brussels’ liberalisation agenda.

French mega retailer Carrefour on 29 May launched an ‘Energie EcoPlanet’ programme, whereby customers will be able to purchase contracts for electricity that stems from certified renewable energy sources, primarily wind and bioenergy.

And on 30 May, France’s Powernext and Germany’s EEX, two power exchanges, announced they will integrate “their entire spot trading activities” under the umbrella of a new company before the end of 2009. 

Piebalgs, who hopes the deal will act as a precursor to the establishment of a single, EU-wide power exchange, called the move “courageous”. It goes “exactly in the direction” the Commission is hoping to push the EU’s energy market, he said.

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