The official launch of a common energy policy in March will be a tricky task for Germany as it faces criticisms over its reluctance to open up gas and electricity markets and for going it alone on relations with Russia.
German presidency priorities on energy include energy-efficiency, expanding the use of renewables, as well as seeking closer co-operation with supplier, transit, and consumer countries.
But the task will not be easy. After the Commission adopts of a new series of energy proposals on 10 January, the German presidency will have little time to draw up an action plan to launch a common energy policy scheduled for approval at the Spring Summit in March.
In particular, the ongoing liberalisation in the gas and electricity sector, a prerequisite in the eyes of the Commission to any real European energy policy, is creating unease in German business and political circles.
German utilities recently came under close scrutiny for alleged antitrust practices. On 12 December, the Commission raided the offices of major German power utilities RWE, E.ON, EnBW and Vattenfall. The move followed similar inspections in May over suspected price-fixing.
Although energy liberalisation is officially backed by Berlin, further moves in that direction are being resisted by Chancellor Angela Merkel. On a recent visit to Paris, she backed French President Jacques Chirac in rejecting Commission calls for so-called ownership unbundling, a move that would see former state monopolies such as E.ON and EdF broken up into companies dealing with transmission and power generation separately (EURACTIV 11/12/06).
Competition Commissioner Neelie Kroes has repeatedly argued that the absence of full unbundling in power markets leads to “systemic conflicts of interests” where operators deny network access to new competitors.
In the face of German and French opposition, Commission President José Manuel Barroso is said to be considering a less radical approach where networks would remain in the hands of former state monopolies. In exchange, the role of national regulators would be strengthened to ensure fair and neutral access to pipelines and electricity transmission networks.
However, Germany’s difficulties with the EU on energy do not end there. Last year, it signed a deal with Gazprom to build a new gas pipeline under the Baltic Sea, in an effort to secure its long term gas supplies. The move triggered furious reactions from Warsaw which said it had been bypassed, in contradiction with EU solidarity principles (EURACTIV 9/09/05).
It also raised questions as to Germany’s willingness to support a truly European approach in dealing with powerful suppliers like Russia.
Other problems are also likely to surface. While greater EU co-operation on energy is widely accepted, it could quickly cross national sovereignty ‘red lines’ as member states keep the final say on their preferred choice of energy mix.
Here too, Germany’s nuclear phase out runs in opposition with choices made in other countries like France, Finland and others. The Commission will attempt to defuse the issue with the publication of a ‘strategic energy review’ that will map out the advantages and drawbacks of each source of energy in terms of supply security, economic viability and environmental impact.