'Serious malfunctions' in energy markets says EU

17 February 2006

The EU’s long-awaited report into the competitiveness of its energy markets has identified “serious malfunctions”, writes Jon Eldridge. Competition commissioner Neelie Kroes said that the European Commission will consider regulatory and anti-trust measures for specific cases of electricity and gas anti-competitive practices identified in its study, which was launched in June of last year. A spokesperson for the Commissioner told Euro-correspondent.com that the Commission is investigating companies that have been operating illegal cartels but that this process could take up to a year. “We will not identify which companies we are investigating because we don’t want them to hide the evidence,” he said. The Commission has the power to impose fines of up to 10 percent of turnover on those companies it finds guilty of anti-trust practices. The Commission has focussed on two areas of anti-trust violation: the closing-off of electricity and gas markets by long-term downstream contracts, and the restricted access to capacity on gas pipelines, gas storage and on gas and electricity 'interconnectors' between member states. The report also says that further analysis is required in the areas of the setting of prices on electricity wholesale markets, including power exchanges, the competitive assessment of the gas/oil price linkage in many contracts and the various practices which inhibit customers from switching suppliers. The publication of the report coincides with fierce criticism of the proposed composition of the Commission’s new High-Level Group on Competitiveness, Energy and the Environment to be led by Vice-President Verheugen (Enterprise) and Commissioners Kroes, Dimas (Environment) and Piebalgs (Energy). Green MEP Claude Turmes called the expert group that will advise EU policy makers on cross-sectoral issues related to competitiveness and sustainability “unbalanced”. The energy technology sector got two seats on the group, while no places were given to renewable energies groups and consumer organisations. A version of this article originally appeared on ICIS news.

 

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