Energy ministers from European Union (EU) member states stroke a compromised
deal to liberalize energy markets yesterday after months of negotiations.
The legislative package for the EU electricity and gas market, finally agreed
by EU energy ministers at their monthly meeting in Luxembourg, is aimed to build
a complete European internal energy market with open competition and effective
regulation.
A main element of the legislation is to break up energy giants so as to make
it easier for new market entrants and promote competition.
The European Commission proposed last year to force energy giants to sell off
their transmission networks, the so-called ownership unbundling.
Due to opposition from Germany and France, EU leaders agreed at a June summit
to let energy giants retain ownership of their transmission networks, but those
networks have to be operated under independent supervision.
However, countries which have already split their energy companies were
concerned that their transmission networks could become targets of takeover by
foreign rivals that have not been broken up.
Ahead of Friday's meeting, the Netherlands, among others, had pushed for the
right to be allowed to block such deals, while Germany had argued that that
would be contrary to EU competition rules.
A compromise deal hammered out after lengthy debate on Friday said that
energy companies of countries which do not practice full unbundling can not take
over transmission networks in countries which practice full unbundling.
The other compromise is related to "the third country clause", which in the
original proposal bans outside energy providers such as Russia's Gazprom from
acquiring gas pipelines and power grids in the EU unless they open their own
networks to EU investors.
Germany successfully diluted the ban and the final agreement said outside
suppliers must be open to EU investments and also meet an European Commission
"security of supply" test.
It was said Germany did not want to upset Gazprom since 40 percent of its gas
imports came from the company.
The European Commission President Jose Manuel Barroso and the EU Energy
Commissioner Andris Piebalgs welcomed the deal.
They said the agreement will enable many of the benefits of an open and
competitive energy market including fair prices for citizens and industry, open
up business opportunities for new or smaller companies and set out clear
investment conditions for new power plants and transmission networks.
"I am delighted by this extremely good news for consumers and businesses in
Europe. It is a crucial step towards the completion of the single market,"
Barroso said.
After the compromise, the deal still needs approval from the European
Parliament, which tends to take tougher stance on the unbundling of energy
giants.
The commission said the whole package is expected to be adopted in the first
half of 2009.