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EU Commission rejects bid to water down energy market deregulation

EU Commission rejects bid to water down energy market deregulation

The European Commission said Wednesday that a watered-down energy deregulation plan by eight EU governments, led by France and Germany, would fail to increase competition or lower gas and electricity rates across Europe.
EU antitrust chief Neelie Kroes reiterated that deregulation of Western Europe's energy markets can only succeed if gas and electricity companies focus on either producing energy or their gas and electricity distribution networks.
Such ownership "unbundling," she told EU business leaders, was key to overhaul the EU's energy sector where former state-run monopolies are still dominant and reluctant to make much-needed investment in infrastructure that might benefit new rivals.
The EU wants to break the grip over the supply chain held by energy titans such as France's EDF and Germany's E.On to help generate more rivalry and stitch together Europe's fragmented national energy grids.
Last fall, the European Commission proposed full ownership unbundling or _ alternatively _ allowing energy companies retain their hardware of grids and pipelines provided they lease them to operators not active in energy supply, generation and production.
It also proposed that foreign firms be banned from EU gas and electricity markets unless they, too, cast off their transmission operations _ a swipe at Russia's OAO Gazprom, which supplies 25 percent of Europe's gas and has already acquired stakes in EU energy and pipeline businesses.
While breaking up energy giants is supported in Britain, the Netherlands, Denmark and other nations it is strongly resisted in Germany and France.
Ahead of an EU energy ministers Thursday, France and Germany _ along with Austria, Greece, Luxembourg, Bulgaria, Latvia and Slovakia _ put forward an alternative deregulation plan that Kroes termed insufficient.
Diplomats said the eight countries proposed separate managements for production and distribution _ a situation that already exists in many countries _ that are still accountable to the same shareholders.
Kroes said this "does ... not seem to meet the goals that we all seek to achieve" because it creates no "structural independence of decision making" in distribution.
By retaining ownership of production and transmission, Kroes said, energy companies can deny access to their distribution networks to outsiders and choose not to invest in grids and pipelines, which erodes competition and threatens security of supply.
She said the European Commission continues to insist "that there is no actual or potential conflict of interest within" energy companies.
EU energy companies have resisted repeated deregulation attempts in the last decade. Kroes said it shows. "It is common knowledge that these markets are still not working as they should," she said adding that energy markets are still too closed and too national.


Updated : 2021-04-14 04:36 GMT+08:00