Speak Up Energy

The European Commission has won an important victory in its crusade against former energy monopolies when German energy giant E.ON offered to sell-off its high voltage electricity grid to settle ongoing EU antitrust inquiries.In its third liberalisation ‘package’ proposals unveiled on 19 September 2007, the Commission left member states with two options to complete the liberalisation of the EU energy sector:

  • Forcing big energy firms to sell off their power transmission and gas storage assets in order to keep these activities fully separate from energy production (‘Ownership unbundling’), or;
  • allowing firms to maintain ownership of their transmission assets but leave their management to an Independent System Operator (ISO) responsible for taking investment and commercial decisions.

In a statement on Thursday (28 February), E.ON said it “proposes to commit to sell its electricity transmission system network to an operator which would have no interest in the electricity generation and/or supply businesses”.The surprise offer would effectively ‘unbundle’ E.ON’s electricity generation and transmission activities, a move which the Commission has long supported as a necessary step to complete the liberalisation of
Europe’s energy sector. “These proposals, if adopted, would structurally change the electricity sector in Germany and could spur competition in the sector to the benefit of domestic and industrial customers,” E.ON said.The timing of the announcement also came at a crucial moment, just hours before EU energy ministers were to meet in
Brussels for a discussion on energy, which included the Commission’s controversial ‘unbundling’ proposals.E.ON had until now been a staunch opponent to the Commission’s plans for full ‘ownership unbundling’ and the announcement apparently took the German government by surprise.Earlier this month, Germany, France and six other EU member states outlined proposals for a ‘third option’ on energy liberalisation in a move aimed at preventing the breakup of vertically-integrated energy firms such as E.ON and EDF of France.

The ministerial meeting ended with no agreement other than a shared determination to come to a political agreement at the next meeting, on 6 June.

From Eur Activ

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