MEPs threaten to walk out of EU energy market talks

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MEPs are considering walking out of negotiations on opening the EU’s gas and electricity markets as talks between the European Parliament, the EU executive and the Czech EU Presidency appear to be deadlocked.

MEPs expressed their disappointment with the Czech EU Presidency, accusing it of lacking respect for the Union’s co-legislator when debating the third energy market liberalisation package.

During a debate in the Parliament’s committee on industry, research and energy (ITRE) today (12 February), they argued that the presidency is failing to cooperate, not only on this file but also on telecommunications and the Working Time Directive.

“We have a democratic mandate,” stated Eluned Morgan (PSE), rapporteur on the electricity internal market, arguing that it was time the Council recognised the Parliament as representative of European citizens, particularly consumers.

Last week’s trialogue meeting was “stormy” and left the Parliament “very frustrated with the Council,” a source close to the file told EURACTIV. MEPs are now looking ahead to the meeting on 18 February as the “point of no return”.

The main bone of contention remains the issue of ‘ownership unbundling’ (EURACTIV 29/05/08). The Parliament backs the full break-up of large vertically-integrated energy firms which simultaneously control electricity production and distribution assets.

By contrast, under pressure from France and Germany, the Council is proposing a “third way” alternative, giving former state monopolies the right to retain ownership of their gas and electricity grids, provided that they are subject to outside supervision. Its position is strongly influenced by France and Germany, which have to take into account the interests of their energy giants, EDF and GDF (France) and E.ON and RWE (Germany) (EURACTIV 13/10/08).

MEPs argued that while they had repeatedly shown willingness to compromise, the Council refused to budge from its position, not only on unbundling but also on foreign investments (the so-called ‘Gazprom clause’), smart meters and the powers of national regulatory authorities, which the Parliament sees as entirely independent of governmental supervision.

“My feeling is that we should put off negotiations if the fourth column is still empty at the next meeting,” said Alejo Vidal-Quadras (EPP-ED), rapporteur on one of the dossiers on the package, referring to a lack of progress on the issue of unbundling. Antonio Mussa (UEN), rapporteur on the market in natural gas, on the other hand said the Parliament should start to prepare for a second reading.

MEPs would like to see consumer protection and energy poverty on the agenda alongside unbundling, but there is also disagreement regarding the order of topics discussed. The committee lamented that the Council had refused to discuss these somewhat less controversial issues before diving into unbundling.

A Czech Presidency official brushed off the accusations as a negotiation strategy. He insisted that the Council is cooperating fully, but needs to preserve some room for manoeuvre, because it was difficult to reach a common position in the first place.

He admitted that time is pressing, but said the institutions have a “realistic timetable”, while “reaching an agreement on the package remains a priority for the Czech Presidency”.

Time is now running out, as the institutions have only four weeks to reach an agreement if they want to close the file during before the Parliament goes into recess for the June elections.

On 19 September 2007, the Commission presented its proposals for a 'third package' of proposals to further liberalise the EU's energy market (EURACTIV LinksDossier)

The proposals sparked much controversy over the issue of 'ownership unbundling', meaning the break-up of large vertically-integrated energy firms like EDF and E.ON, which simultaneously control electricity production and distribution assets.

France, Germany and six other member states have been leading the resistance to the unbundling plans. Together, they tabled an alternative proposal in February 2008 which they argue would guarantee a similar result, without forcing energy firms to split their energy production and transmission businesses (EURACTIV 01/02/08).

Energy ministers finally clinched a deal on the Council's position on 10 November 2008, which nevertheless forbids energy producers from buying up the transmission businesses of energy companies in European countries where full unbundling has been introduced (EURACTIV 13/10/08).

The Council's position is still far removed from the Parliament's insistance on full unbundling, and the trialogue negotiations that started between the institutions in January 2009 have made minimal progress so far.

  • 18 Feb.:  Next trialogue meeting scheduled.
  • 31 March: ITRE committee to vote on the package.

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