Speak Up Energy

A Franco-German alternative to the Commission’s electricity market liberalisation proposal was rejected by a narrow margin yesterday (6 May) during a key vote in Parliament’s Industry Committee. MEPs also voted against a Commission substitute plan to put in place a strict regulatory regime policed by an Independent System Operator (ISO).In its third liberalisation ‘package’ proposals unveiled on 19 September 2007, the Commission left member states with two options. The first is to force 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’). The alternative is to force firms to transfer the management of their distribution operations to an Independent System Operator (ISO) responsible for taking investment and commercial decisions. France and Germany vehemently oppose both plans, and formed a blocking minority with the support of six other member states (Austria, Bulgaria, Greece, Luxembourg, Latvia and the Slovak Republic). Together, they tabled a ‘third way’ proposal which would not require a change in firms’ ownership structures but, they argued, would nonetheless guarantee a similar result by introducing safeguards to ensure the independence of energy grid operators. By rejecting both the ‘third way’ and the ISO option, the Parliament’s Industry, Research and Energy (ITRE) Committee has effectively given its backing to full ownership unbundling as proposed by the Commission in its third package.MEPs also gave broad backing to the overall report, prepared by UK Socialist MEP and rapporteur Eluned Morgan, with 31 votes in favour, 17 against and two abstentions. But the narrow margin of the rejection of the third way amendment to the Morgan report – 26 MEPs voted against it, while 22 were in favour and three abstained – may be an indication that France and Germany and the six other member states who support them will continue to push for compromises to full ownership unbundling during upcoming negotiations. France and Germany’s energy giants, notably RWE and EDF, remain vehemently opposed to the breaking up of their assets through unbundling, which they claim is illegal and would not lead to lower prices and more competition, as argued by the Commission.

A European vote? Of the 20 MEPs who supported the third way proposal in the committee, nearly all hail from member states opposed to breaking up energy firms, a reflection of comments made by MEP Alejo Vidal-Quadras ahead of the vote.”The national element will have considerable weight in this vote,” Vidal-Quadras told EurActiv in an interview. But the MEP also expects a more “European logic” to prevail as the discussions move forward, implying that Parliament, Council and the Commission could still strike a compromise agreement – possible in heated last-minute negotiations – in order to prevent the third package from failing entirely.

France, so far unwilling to budge on the unbundling issue, has already indicated that it “could live without this package,” and the eight member states who oppose unbundling possess enough votes to form a blocking minority in the Council.The Commission meanwhile has signalled its willingness to compromise on the third way proposal under the condition that a series of tough conditions are taken on board. But the committee’s support of unbundling appears to have strengthened the Commission’s position vis-à-vis the group of eight member states, an indication that Brussels may be unwilling to compromise much further to accommodate Berlin and Paris.

Energy ministers will try to reach a political agreement on the file on 6 June.

From EurActiv

Author :