Est. 2min 01-02-2008 (updated: 28-09-2012 ) energy_02.jpg Euractiv is part of the Trust Project >>> Languages: Français | DeutschPrint Email Facebook X LinkedIn WhatsApp Telegram France, Germany and six other member states have submitted proposals outlining a 'third option' for energy liberalisation. The full document, seen by EURACTIV, argues that the Commission's proposals to unbundle vertically-integrated energy firms will not achieve their desired effect in terms of more grid investments and lower energy prices. 'Effective and efficient' unbundling The set of amendments for a third option for energy market liberalisation are proposed in a letter dated 29 January and signed by Austria, Bulgaria, France, Germany, Greece, Luxembourg, Latvia and the Slovak Republic. The letter, sent to the Commission and to the Parliament's Industry (ITRE) Committee, features only one significant change compared to an earlier draft (see EURACTIV 29/01/08) Instead of suggesting that national regulatory authorities could "oblige" Transmission System Operators (TSOs) to carry out grid and infrastructure upgrades, the new text proposes that regulators can "request" TSOs to invest "by all legal means". Beyond this change, the proposals put forward essentially the same message: that fair competition can be achieved without full ownership unbundling or third-party (ISO) oversight by ensuring a number of safeguards concerning the independence, management and investment decisions of TSOs. ISO not a 'genuine alternative' The status of TSOs are at the heart of the disagreement between the eight member states and the Commission over how large, vertically-integrated energy firms should be treated during the further liberalisation of EU electricity and gas markets. Obliging energy-producing firms to give up their transmission assets is "not compatible with constitutional law and with the free movement of capital", according to the letter, which argues that "no correlation can be found between the implementation of [ownership unbundling] and the levels of prices and investments which are actually determined by many other factors". However, the Commission insists that energy firms cannot, in an environment of effective and fair competition, simultaneously control the means of energy production and transmission. In the absence of full ownership unbundling, the EU executive argues that the ISO option is the minimum level of separation necessary to ensure investment and access to grids for competitors and prevent conflicts of interest. But Germany and France, who are "deeply concerned by the negative social consequences" of unbundling, argue that the ISO option is a kind of ownership unbundling and "cannot therefore be presented as a genuine alternative". Read more with Euractiv IEA refutes 'peak oil', points to lack of investment Insufficient investment, political instability and blocked access to key oil and gas reserves have distorted the global fossil fuel market and driven up prices, according to the International Energy Agency, which has downplayed concerns about imminent oil shortages. Subscribe now to our newsletter EU Elections Decoded Email Address * Politics Newsletters PositionsEU Energy Commissioner Andris Piebalgs told MEPs during a 31 January hearing in the Parliament's ITRE Committee that "few proposals have been assessed as well" as the Commission's third liberalisation package, and the Commissioner remains "convinced" that full unbundling or the ISO option remain "the best solutions". The Commission will examine the Franco-German proposal "very carefully", Piebalgs said, but warned that if the options put forward do not fulfill the criteria for TSO independence, the Commission will not be in a position to consider the proposals as a "credible alternative". Matthias Kurth, Chairman of the German Bundesnetzagentur (a federal agency that oversees the liberalisation of the country's grids), supported his government's proposals during the same hearing, saying they would lead to "more effective and enforceable legislation without a lot of bureaucracy". Kurth also argued that he hears "no more complaints anymore" about blocked grid access, adding that large German firms are trying to expand key infrastructures but are being blocked because of serious delays in issuing building permits. He claimed that unbundling would not address this issue. But Green MEP Claude Turmes, a staunch proponent of unbundling, countered Kurth's argument, saying that Germany's large energy firms are being denied building permits because of public opposition. The firms, such as E.ON and RWE, are no longer seen as operating in the public interest, Turmes said. Paolo Scaroni, CEO of Italy's energy giant ENI, said his company supports France and Germany. “We will present our views later, but already now we can say that we welcome the Franco-German proposal”, he said during the hearing. Jorge Vasconcelos of the Portuguese firm New Energy Solutions argued that ownership unbundling "does not go far enough", and called for more market monitoring to ensure fair play. Christian Democrat MEP Alejo Vidal-Quadras, the Parliament's rapporteur on the electricity network regulation, argued that the third option should be "taken into consideration" since it goes potentially further than previous EU provisions on legal unbundling. BackgroundIn its third liberalisation 'package' proposals unveiled on 19 September 2007, the Commission left member states with two options to complete the liberalisation of the EU gas and electricity sector: Forcing big energy firms to sell off their power transmission and gas storage assets in order to keep these activities fully separate from energy production ('Ownership unbundling'), or; allowing firms to maintain ownership of their transmission assets but leave their management to an Independent System Operator (ISO) responsible for taking investment and commercial decisions. The Commission has already made it clear that the ISO option is a fallback, with 'ownership unbundling' the preferred option. Such a drastic measure is necessary, according to the Commission, to guarantee non-discriminatory access to energy grids for smaller firms wishing to compete in markets dominated by vertically-integrated energy giants, such as EDF in France and E.ON in Germany. But Germany and France vehemently oppose the Commission's plans, and have been working to elaborate alternative proposals and garner the support of other member states in order to form an eventual blocking minority in the Council. Timeline June 2008: Parliament first reading expected on third energy package. Further Reading EU official documents Commission:The EU Electricity & Gas markets: third legislative package Governments Austria, Bulgaria, France, Germany, Greece, Luxembourg, Latvia and the Slovak Republic:Letter containing 'third option' proposal(29 January 2008) France, Ministry of EcologyHuit États de l’Union européenne, dont la France, proposent à la Commission européenne une alternative à la séparation patrimoniale des réseaux de transport d’électricité et de gaz(30 January - French only)
