Brussels, 19/12/2001 (Agence Europe) - The process of fully liberalising the EU's gas and electricity markets has begun, with problems as everyone is aware but Europe is overall pretty confident about the future and the upcoming Spanish Presidency seems determined to make the most of the next six months to drive the issue forward. The internal gas and electricity market may, however, be somewhat of an empty concept, given the lack of necessary interconnection infrastructure for cross-border trade. While still not a critical situation for gas, the internal market for electricity represents less than 10% of total electricity consumption in the EU and therefore the European Commission will be unveiling an action plan on Thursday to provide the EU with the necessary infrastructure and avoid a California-like crisis.
Seven critical bottlenecks have been identified in the electricity sector by the Commission: the border between France and Spain, West Denmark and Germany, the borders of Benelux as well as those of Italy, the interconnection between the UK and continental Europe, Greece and Ireland. Five key gas supply projects for Europe have been identified. The plan that the Commission is preparing to unveil consists of a Communication and draft Decision revising the Trans-European Network Energy guidelines (TENEs). It will aim to optimise the use of existing infrastructure through transparent congestion management and tarification rules; encourage the construction of new infrastructure; set a new list of Priority Projects by revising the TENE guidelines and concentrating financial support on the 12 electricity and gas projects that should be declared of European interest; raise political awareness and commitments at all levels in terms of energy infrastructure; and secure gas supplies for Europe. The Commission is proposing to increase the maximum share of possible co-financing for Priority Projects from 10% to 20%.
To meet these objectives, the Commission is proposing thirteen concrete measures covering minimum demands in terms of gas and electricity congestion management; proposing common technical/administrative interconnector standards; developing a cross-border tariff system to come into force in 2003; putting forward guidelines on congestion management and cross-border transmission tarification for gas and electricity; revising the TENE guidelines (including a new list of Priority Projects and an increase in the ceiling for possible Community co-financing for them); a report on security of supply, outlining the challenges facing the Union in meeting demand and diversifying gas supplies; and actions needed to ensure commercial and financial conditions favourable to long-term investment in gas and electricity.