EU ENERGY ministers yesterday agreed the broad outline of a deal to open their gas and electricity markets to more competition in a move that could enhance energy security. But Germany said last night it could not accept the agreement and it may vote against the final energy package.
"Even though all member states cannot agree with all parts of the package, I note the council has reached a broad agreement on essential elements of the third energy package," said Slovenian economy minister Andrej Vizjak, who chaired the negotiations in Luxembourg because his country holds the rotating EU presidency.
The European Commission proposed last year that EU member states should split up the giant energy companies that control Europe's gas and electricity networks. In particular, it focused on proposals to make firms "unbundle" network operations from the service arms that provide energy direct to customers.
The commission argued that if energy giants sold off their network arms new competitors would be able to enter the market and access electricity and gas grids. This, in turn, would boost energy security by ensuring that huge national champions did not dominate all the energy supply routes servicing EU states, it said.
Germany and France led opposition to any forced break-up of national energy champions and proposed allowing vertically integrated utilities to keep ownership of transmission networks under strict supervision by a regulator.
France agreed to a compromise deal proposed along these lines yesterday, which will enable firms to keep network assets on their balance sheets as long as they do not interfere in their network arm.
"There is an agreement on an internal market that sets clear rules on transparency, investment and access to networks," said French environment minister Jean-Louis Borloo.
Minister for Energy Eamon Ryan said a deal was in Ireland's interests because we were at the end of a gas pipe running all the way from Russia. He recently deferred a plan to remove the Republic's power network from ESB ownership, pending the outcome of an independent review.
The ESB's unions threatened to strike over the move, while the company's employee share option trust also opposed it. The Minister has said since that the proposal is still Government policy.
Germany, which has been acting to protect its big utilities such as E.ON and RWE, said it could not accept the broad outline of the deal. "I apologise that I cannot agree to these conclusions," said German ambassador Peter Witt. "If you are going to ask us to vote on the entire text, my vote would be more negative than positive," he added.
In particular, Berlin is objecting to a clause that says member states may take action to ensure a level playing field in energy markets. This is coded language for ensuring that states could block any takeover approach made by a big energy giant from a country that refuses to "unbundle".
The outline deal will not become law until approved by the European Parliament, which has powers of co-decision on the issue.
It will also come back to EU ministers for a final decision.
