Energy
 
Energy markets liberalisation 

Following the adoption of two directives for the liberalisation of the electricity and gas markets in 2003, industrial consumers such as the chemical industry have been able to freely choose their supplier since July 2004. At least in theory.


Overall progress in the liberalisation of European energy markets has been disappointing. Cefic confirms the final results of the European Commission’s Sector Enquiry released in January 2007 (see our position paper ). The dominance of a few energy producers in each Member State represents a major obstacle to competition and competitive prices in electricity and gas markets. Cefic therefore calls for an ambitious legislative proposal on further energy liberalisation.


Cefic welcomes recent initiatives by the Commission such as
  • The EC Communication on Energy Markets  (January 2007)
  • The follow-up actions of the Sector Enquiry including raids on energy giants
  • The recommendations on energy markets made by the High Level Group on Competitiveness, Energy and the Environment (2 June 2006 report).
  • The Commission’s infringement procedures against 17 Member States to foster the full implementation of the Gas and Electricity Directives (April 2006)

To achieve open, competitive energy markets, Cefic calls for:

  • effective unbundling of historically integrated gas and electricity companies. Incomplete unbundling will inevitably limit the effectiveness of many agreed guidelines and initiatives
  • increased powers to national regulators so that they can deliver on cross-border electricity and gas transmission
  • increased transparency. Equal access to accurate, timely and comprehensive information is crucial, especially on available network and storage capacities, including cross-border capacity, actual flows in bottlenecks, available capacity, production schedules and on-line production of power plants
  •  the removal of contractual bottlenecks and further interconnections.

Cefic is also contributing to the Madrid and Florence Forums, where the liberalisation of electricity and gas markets is discussed with Commission officials, national government representatives, suppliers, network operators, traders and consumers. However, agreements undertaken in these forums are not being implemented by many energy suppliers. Urgent measures should be taken to ensure a proper follow-up.

Cefic also calls for the immediate resolution of the Emissions Trading Scheme (ETS) driving up power prices. This impact on power prices is so significant (often higher than market dominance) that a failure to address this issue will result in a failure to achieve the ultimate aim of energy markets liberalisation: competitive energy prices. The impact of ETS on power prices needs to be tackled through the modification of the allocation methodology of allowances: allocation should be based on performance (e.g. through benchmarking) and take into account production levels.

Related documents:

 

Cefic contact: Martina Beitke

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