End Game: What now for Europe’s energy markets?
At the end of April 2009, the European Parliament will hold its plenary session, in which it will approve the so-called ‘Third Energy Package’. The details pertaining to the liberalization of the EU’s gas and power markets have now been agreed and are of critical importance to all involved in European energy.
In capitulating to the European Council’s demands, the European Parliament has allowed utilities to retain effective control over their distribution networks. The incorporation of compulsory unbundling into the EU legislature is now off the agenda for the foreseeable future. However, vertically integrated energy firms may yet be forced to spin off their transmission assets as a result of unilateral action by the Competition Commission.
- The final agreement contains a series of half measures which, in practice will allow utilities to maintain a firm grip on transmission networks.
- The creation of a European Network of Transmission System Operators for Electricity (ENTSOE) will encourage cross-border energy trade, but cannot compensate for a lack of mandatory unbundling requirements.
- Assuming that the Competition Commission retains its liberal outlook, the EU may yet break the current oligopoly in energy markets.
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