Florence, 04/03/2002 (Agence Europe) - The participants at the eighth meeting of the European Electricity Regulatory Forum, held in Florence on 21 and 22 February 2002, resulted in an agreement on entry into force of a provisional cross-border tariff-fixing system on 1 March. This system will be replaced on 1 January 2003 by a new more cost reflective system, the terms of which were discussed and approved in the Tuscany capital. Stressing this significant breakthrough, the Forum, composed of national regulators, Member State representatives and all relevant industry stakeholders, concluded that it is now important, in the light of progress made on cross-border issues, that rapid progress is now made in reaching agreement by the Council and European Parliament on the Commission's proposals of March 2001 to complete the internal energy market. "The result of this Forum is an important step forward for more cost-reflective trading mechanisms, contributing to the development of a real integrated electricity market and enhancing security of supply" underlined Loyola de Palacio, Energy Commissioner, who felt that this "paves the way for progress in the coming weeks towards completing the Energy Single Market".
The agreement on the new tariff fixing system for access to electricity networks in Europe foresees low, standardised charges for electricity exporters throughout the EU. Existing and various import, export and transit charges will be abolished, thus simplifying the electricity trade and making it cheaper. Under this system, all existing import and transit charges for access to the network would be abolished, with only an export charge of one euro per Mwh remaining until the end of 2002. The Association of European Transmission System Operators (ETSO) has announced it is ready to set in place a harmonised tariff-fixing system on 1 March this year. It will apply to all EU Member States in continental Europe as well as to Switzerland. Austria, the exception, will apply it from April 2002. The European Commission will verify that all transmission system operators apply the system correctly and that its concrete implementation respects Community law.
Furthermore, the agreement on the principles and guidelines of a revised system, which will come into effect on 1 January 2003, provides for the system to be more cost-reflective and, as a further improvement to the 2002 system, envisages the abolition of all import, export and transit charges for cross-border electricity transactions. The system would also envisage separate geographic location factors in the tariff structure for network access, which would give an indication of the most appropriate or inappropriate areas for locating new generation capacities. The scheme will included all EU countries plus Norway and, subject to certain conditions, also Switzerland. The Commission hopes that candidate countries will be able to join the new mechanism in 2003.
The Forum noted, moreover, progress made in the arrangements for allocating limited interconnection capacities between national transmission networks. In many cases, this capacity is allocated according to market-based methods, mainly through auctioning procedures. One continues, however, to note interconnections still existing where methods applied are not yet entirely satisfactory. The Forum stressed the need for market-based allocation methods to be in place throughout the EU.
With regard to energy infrastructure, the Forum insisted on the importance of ensuring efficient use of existing energy infrastructure and a stable regulatory framework favourable to investment in new infrastructure. It was agreed that, on the basis of the Commission's Communication on energy infrastructures, further work should be undertaken in this respect supported by all participants of the Forum. (Further information on the work of the Florence Forum will soon be available at: http: //europa.eu.int/comm/energy/en/elec_single_market/florence/index_en.html).