New EU legislation that would split power distribution from network ownership are being resisted by France and Germany amid a growing body of reports calling for full ‘ownership unbundling’.
EU energy regulators have called on the Commission to put forward new legislation to finalise the liberalisation of energy markets and free regulators from political intervention.
The European Regulators Group for Electricity and Gas (ERGEG), an advisory body to the European Commission, submitted a report on the development of EU energy markets on 8 December 2006.
It calls for new sweeping legislation on ‘unbundling’ that would fully separate network ownership from service delivery and reinforce the powers of national regulatory authorities.
ERGEG Chairman Sir John Mogg, said: “Some integrated energy firm may claim that ownership unbundling will not help competition. This is untrue. Insufficient unbundling is often the most persistent barrier to competition.”
The ERGEG report criticises what it describes as “the vague implementation of the unbundling provisions of the existing directives”.
“When they are transposed into national law, they leave a lot of discretion to the integrated companies, and companies often act without fear of enforcement because of a lack of adequate powers of the regulators,” ERGEG said.
The main suggestions in the report include:
- Full unbundling legislation;
- freeing regulators from political intervention;
- stronger political commitment to regional energy initiatives, and;
- abolishing regulated energy prices which “distort competition”.