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Friday, August 8, 2008

Europe and energy, the battle continues

Every thought that energy unbundling would be cool. Well obviously it is not so cool anymore. You can see from the following two articles how the whole idea goes to hell. Slowly, but surely. The funniest things is why they started it at all, I mean, they cannot have seriously thought they'll break energy cartels without strong will. Oh, well, enjoy.

Parliament insists on splitting energy giants

19 June 2008

MEPs have rejected a deal between the Commission and member states whereby large electricity producers could retain ownership over power distribution assets under strict conditions. Parliament is pushing for full ownership separation as the 'only option' for EU electricity market liberalisation.

MEPs gathered for their first reading vote in plenary yesterday (18 June) on the Commission's proposal concerning the EU's internal market in electricity. A sizeable majority - 449 in favour and 204 against - backed a report drafted by UK Socialist MEP Eluned Morgan. Morgan's report, endorsed by the Industry Committee in May, backs ownership unbundling as the only option for liberalising the EU's electricity sector (EurActiv 07/08/08).

The vote puts Parliament at odds with the Council, which reached a general agreement on a 'third way' alternative to ownership unbundling based on a joint Commission and Slovene EU Presidency compromise (EurActiv 10/06/08). It also eliminates the possibility of a first-reading agreement, as requested by EU heads of state during the European Council in March, raising the spectre of an indefinite delay.

The MEPs are making it clear, however, that any potential deal with the Council on the third way will depend on at least two conditions: that the third way option is 'effective' from the perspective of fair competition and market access, and that transmission system operators (TSOs), who control electricity distribution through the grids, are truly independent from electricity producers.

Unlike for the electricity sector, MEPs in the Industry Committee in May said they could support exceptions to full ownership unbundling in the gas sector (EurActiv 20/05/08).

The impact of the gas vote on the electricity file may ultimately prove to be limited, however. The Parliament's criteria with respect to effective separation and TSO independence have not been clearly defined and remain subject to detailed negotiations with member states at expert level, according to a Commission source close to the file.

The Parliament is also calling for a number of measures designed to protect energy consumers, including impoverished sectors of society that are struggling with rising fossil fuel and related electricity costs.

Consumers should be allowed to change energy suppliers within two weeks and be permitted to withdraw from contracts without penalty, according to the Parliament. National authorities should also be able to impose temporary price caps "in uncompetitive markets for a defined and limited period". source

My comment: So far so good, now check the next article.

Parliament backs 'third way' for gas market opening

10 July 2008

A large majority of MEPs have sided with Germany and France by voting in favour of giving member states the option of allowing their energy firms to maintain ownership over both gas supply and transmission infrastructure.

The vote - 579 in favour with 80 against and 52 abstentions - paves the way for a deal between the Council and Parliament on EU gas sector liberalisation, since the measures endorsed by the Parliament are in line with a June agreement among member states that would allow former state monopolies such as GDF in France and E.ON in Germany to retain ownership of their gas grids (EurActiv 09/06/08).

Paris and Berlin insist such a deal should also be extended to the electricity sector.

In its original proposals to further liberalise the EU's gas and electricity sectors, the Commission was pushing for either the full separation of energy firms' gas and/or electricity supply assets from transmission assets through 'ownership unbundling'. A second option, the so-called Independent System Operator (ISO) model, would have allowed companies to retain indirect legal ownership while ceding operational control (EurActiv 20/09/07).

France and Germany, backed by six other member states, were successful in watering down the plans. They introduced the possibility of a 'third way' option, whereby companies retain full network ownership and control, while operations are managed by an independent transmission operator (ITO) that would ensure fair network access and push for investments to upgrade and expand grids.

In its vote, Parliament rejected the Commission's ISO option but backed the ITO, or third way, as favoured by the eight member states. However, Parliament wants to strengthen the ITO model by creating an 'independent trustee' who would closely oversee the internal decisions of the gas transmission system operator.

MEPs are also calling for a number of additional consumer protection measures, including the right to withdraw from gas contracts without charge.

While the gas vote makes a deal between the Parliament and Council on gas liberalisation more likely, strong differences remain in the electricity sector. In June, Parliament voted against both the ITO and ISO options, preferring full ownership unbundling as the only option for electricity (EurActiv 19/06/08). source

My comment:I simply cannot understand on what ground people switch opinions and the unbundling seems to go to hell. I mean what exactly will be a gas unbundling is EON and GDF can hold their possessions and won't have to do anything at all. Oh ,yeah, the ITO. True, it's not exactly clear who will be in that ITO and whose interests it will protect, but ok. Obviously energy cartels are way too strong to be fought this way. We'll count on the oil crisis to solve the problem.

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