Brussels, 19/03/2007 (Agence Europe) - In a position paper published after the European Council adopted a three-year energy programme (see EUROPE 9383), EURELECTRIC, the Union of the Electricity Industry in Europe, came out against ownership unbundling of operator's production and distribution businesses, calling for a 'progressive and well-steered grouping of TSO (transmission system operators) activities' as 'the best route to developing a Europe-wide electricity market' (see also EUROPE 9381). EURELECTRIC 'favours a regional model whereby TSOs would gradually link up those of their activities that affect cross-border trade, so as to act seamlessly.' In its position paper, EURELECTRIC argues that such a regional model would be an engine for integrating markets, restricting the role of vertically integrated companies to that of mere owners of transport assets. It notes that forcing vertically integrated companies to divest themselves of their transmission assets will not in and of itself lead to any development of competition on a grand scale, but would strengthen the currently prevailing national characteristics. EURELECTRIC also recommends continued harmonisation of the powers of national regulators to ensure better implementation of EU directives, noting: 'unless the Commission is properly involved, it is unlikely that the 'ERGEG plus' model as described in the energy package (published by the European Commission in January, see EUROPE 9341, Ed.) will overcome the obstacles to market integration and market development that have been identified. Market integration requires a more European approach to regulation on cross-border issues, with a role for the Commission in taking appropriate action and overseeing the regulatory process.' While supporting the development of renewables, EURELECTRIC highlights the need for them to be integrated into the electricity market, 'for example through the development of harmonised market-based schemes for RES (renewable energy sources, Ed.) support, and measures to reduce the impact on the grids of connecting RES power.' (eh)