zondag 3 mei 2009

EU plans more energy competition

New legislation will target European energy giants in order to reduce the boosting competition in the market for supplying gas and electricity.

The package is already backed by EU ministers. It was adopted by the European Parliament last Wednesday. But it softens an original proposal to unbundle the control of big energy utilities over power generation and distribution. Producers will keep the control of grids and pipelines under supervision. The "ownership unbundling" drive was an initiative of the European Commission to liberalise the EU's energy market.

The commission was concerned about EDF of France and E.ON of Germany. Their domination of the market is limiting the opportunities for smaller firms to be competitive. France and Germany led opposition to the original plan, pressing for alternatives to breaking up the energy giants that dominate the market.

Full ownership unbundling is an option for governments. Governments will be able to choose for two alternative models, which let energy producers retain control of gas and electricity networks. EU member states can make energy firms hand over the management of their transmission network to a separate independent system operator (ISO).

Firms can also preserve integrated supply and transmission under the independent transmission operator (ITO) model.
The ITO includes a supervisory body with third-party shareholders. It includes also a compliance programme to prevent discriminatory actions in the market. EU Energy Commissioner Andris Piebalgs said the compromise deal will ensure a market which is proper and honest for everyone. But Green MEP Claude Turmes said the legislation was not strong enough to contain the domination of the sector by oligopolies.

The BEUC European consumers' association was also disappointed. Their meaning: even if the new energy package offers more rights to consumers, these rights cannot be ensured without real competition and in particular without full ownership unbundling.
The package included measures to improve consumers' rights. Consumers will be able to change their energy supplier within three weeks, and free of charge. There will be an independent complaint mechanisms to settle disputes with suppliers. Consumers will also have the right to compensation for bad service, such as inaccurate or delayed billing.

I think it’s a good try to create a fair market of energy supply. But no matter what measures there will be taken, I think the competition in a market is something you can’t really provide. Everyone wants to offer his products as cheap as possible, in order to gain lots of clients. Sometimes, the service you get is less qualitative! But if I can get the same product of the same quality, I will certainly obtain for the cheapest solution. If the legislation of levelled pricing will be introduced, it’s really another case, and I think the best solution will be a fusion of all suppliers to offer the same product of a higher quality and with a better service!

Source: http://news.bbc.co.uk/2/hi/europe/8013919.stm

Posted by Joachim De Zutter

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