‘Third option’ mooted on energy liberalisation

The Commission and the Portuguese Presidency have asked EU countries opposed to proposals on ‘ownership unbundling’ in the electricity and gas sector to come up with detailed alternatives, as energy ministers prepare for a potentially tense meeting on 3 December.

The Portuguese Presidency has prepared a progress report for the Energy Council next week, outlining member states’ views on Commission proposals to further liberalise energy markets.

The report confirms a widespread opinion among member states whose energy sectors are not yet fully liberalised that the Commission’s proposals are not satisfactory because they would interfere with the property rights of large integrated energy firms. 

The group – led by France and Germany and which also includes Austria, Bulgaria, Cyprus, Greece, Latvia, Luxembourg and Slovakia – argues that neither of the Commission’s two options is attractive enough to garner their support.

“Several member states question the proportionality of the proposed provisions for ownership unbundling – or ISO – that they see as infringing property rights,” says the progress report. “This proposed ISO cannot therefore be presented as a genuine alternative to full ownership unbundling.”

“The Commission and the Presidency invited them to come up with a concrete alternative.”

João Amado, an official working on energy matters for the Portuguese permanent representation in Brussels, says the invitation has already been made explicit on several occasions during meetings of the Council’s energy group that date as far back as October.

“A number of countries do not want either of the proposed two options,” said a diplomat from a country leading the opposition to ‘ownership unbundling’. “The ISO option has attracted nobody,” the diplomat added, explaining that “no-one is ready to die for ISO”. 

“The Commission has to agree to review its position”.

Economic ministers from the nine reluctant countries had already sent a joint letter to the Commission on 30 July, saying that “the idea of the complete separation of production and distribution as the only key to the development of the internal energy market for electricity and gas should be avoided.”

Chief among the supporters of unbundling are the UK and the Netherlands. They are supported by Belgium, Denmark, Spain, Finland, Romania and Sweden. Still undecided are Estonia, Hungary, Ireland, Italy, Lituania, Malta, Poland, Portugal, Czech Republic and Slovenia, the upcoming holder of the EU presidency.

A third option, called “regulated unbundling”, was already presented at the March European Summit in Brussels. The system would involve an independent regulator setting prices for access to energy grids and reviewing investment decisions. 

But it is still unclear exactly how it would differ from the Commission’s proposed ISO option.

Read more with Euractiv

EU industry warns about carbon trading and renewables

The industry lobby group BusinessEurope has warned that the EU must focus more on energy efficiency, rather than renewable energies and emissions trading, if it wants to prevent energy-intensive industries such as chemicals and steel-making from taking their operations elsewhere.