Brussels, 05/02/2008 (Agence Europe) - The public hearing on the 3rd legislative package on the liberalisation of the internal market in energy (electricity and gas) led, on Thursday 31 January, to lively debate between the Council of the EU and the European Parliament on this thorny issue. On the initiative of the chairwoman of the EP energy committee Angelika Niebler (EPP-ED, Germany), several MEPs and experts were invited, along with Energy Commissioner Andris Piebalgs, to debate the advantages of the legislative proposals, presented by the Commission on 19 September 2007 (see EUROPE 9505), for an integrated, efficient internal energy market. After five months of discussion, the prospect of consensus does not appear to be close.
Piebalgs, the architect of the 3rd liberalisation package, argued forcefully for his preferred option for ensuring better operation of the internal market: ownership unbundling of energy operators' activities (generation/supply and network/transport). He showed little enthusiasm for the third way, the option of effective and efficient unbundling, proposed, on 29 January, by eight member states, led by Germany and France inexorably opposed to radical liberalisation of the energy market (see EUROPE 9591). This option, which is based on “structural unbundling” within a vertically integrated energy company “cannot be a credible alternative unless they guarantee the independence of TSOs (Transmission Systems Operators),” he said. “Current rules on unbundling mean that a large number of network operators can effectively discriminate against new entrants,” he argued. The ownership unbundling and very strong independent systems operator (ISO) options were, in his opinion, “the best ways” to ensure that TSOs take independent investment decisions and show no discrimination towards new entrants, who often came from the renewable energy sector. Alessandro Ortis, President of the Italian energy regulator, proved to be a fine ally for Piebalgs defending his arguments. “One of the goals of the package is overcoming assymetries. This will be impossible if we don't go down the path of full ownership unbundling,” Ortis said. Basing his comments on the Italian experience, Ortis said that ownership unbundling had not prevented the main European energy operators, who had tried it, from prospering. The Italian regulator also refuted the arguments of those who opposed ownership unbundling, seeing it as expropriation, and he preferred that it be seen as “the sale of a grid at a fair price”. In response to doubts expressed by Herbert Reul (EPP-ED, Germany) on the consequences for companies, prices and investment of ownership unbundling, Ortis pointed out that it had encouraged increased investment in Italy.
The head of the German Federal Network Regulation Agency (Bundesnetzagentur), Mathias Kurth said that he would agree with the third way as long as it was the “more effective and enforceable, without a lot of bureaucracy”. “Effective structural separation avoids many problems associated with ownership unbundling,” he added, acting as Berlin's spokesman. While Jorgo Chatzimarkakis (ALDE, Germany) wondered where the third way went beyond the 2003 directives, the rapporteur on the regulation on electricity networks Alejo Vidal-Quadras (EPP-ED, Spain) said that the third way was worth “taking into consideration and being evaluated”. Using the Finnish example, where, he said, “the energy market is working well,” Reino Paasilinna (PES, Finland) wondered about the need for separation “pushed to the extent that it brought about a total break between supply and transport”. Managing Director of the Italian energy giant ENI, Paolo Scaroni argued against ownership unbundling which was, he said, “pointless” because of the provisions already contained in the 2003 directives, which provided for guaranteed access to networks. He believed that the “inadequacy” resulting from the distancing of the European markets and the resources that fed them “will give greater influence to producer countries”. Scaroni also highlighted the risks that “if we go down the line of full ownership unbundling, there will be people who will be interested in purchasing our assets”. “We can put forward rules saying that third countries cannot take part in tenders but there is no way of ensuring this will not happen anyway,” he said. Also against ownership unbundling, Rainer Seele, representing the Wingas subsidiary of Russian energy company Gazprom, said that the 3rd package “is not based on market mechanisms” and he warned of the risk that “excessive regulation can be counterproductive”, even though interference through policies was need to attract investment. “We shouldn't interfere in trade, nor should we interfere in ownership. Security of supply will be ensured by investment,” he argued. (E.H.)