Brussels, 10/04/2013 (Agence Europe) - On Wednesday 10 April, the European Commission accepted a set of commitments proposed by CEZ, the incumbent electricity provider in the Czech Republic.
These commitments are now legally binding. bvThe Commission had concerns that CEZ may have abused its dominant market position by reserving capacity in the transmission network in order to prevent competitors from entering the market. After the Commission opened an investigation under EU anti-trust rules that prohibit cartels and abuses of dominant position, CEZ offered to divest significant generation capacity. Following consultation of market participants, the Commission is satisfied that final commitments offered by CEZ adequately address its concerns.
The European Commissioner for Competition, Joaquin Almunia, said: “more competition leads to lower prices. The divestiture of significant generation capacity will allow a new player to enter the Czech electricity market and to compete with the incumbent CEZ. This will benefit all electricity customers”.
In the course of its investigation, the Commission came to the preliminary view that CEZ might have hindered entry into the Czech market for the generation and wholesale supply of electricity, in particular through making a pre-emptive capacity reservation in the transmission system network which it did not need at that moment.
In order to address the concerns expressed by the Commission, CEZ proposed to divest between 800 and 1000 MW of its generation capacity. More specifically, CEZ offered to sell one of the following generation assets in the Czech Republic: i) Pocerady, ii) Chvaletice or iii) Melnik III, together with Tisova. Acquiring any of these assets should allow the buyer to establish itself on the Czech market for the generation and wholesale supply of electricity. The new entrant should then be able to gradually develop a wider portfolio of generation assets and compete effectively with CEZ.
CEZ will carry out the sale under the supervision of the monitoring trustee, who will verify in particular that the transaction would not raise new competition concerns. The buyer will have to be approved by the Commission. (LC/transl.fl)