Single Energy Market - a way forward?

United Kingdom
The European Council met in Barcelona on 15 and 16 March 2002 for its second annual Spring meeting on the economic, social and environmental situation in the European Union. Heads of State or Government, and Foreign and Finance Ministers from the European Union’s Member States also came together with their counterparts from the thirteen candidate countries to discuss The Lisbon strategy and its implementation.

The Presidency Conclusions, the summary produced after each such meeting, notes that in the field of energy the European Council:

  • welcomes the first Commission report on the effective opening of the internal market for gas and electricity, agreed in Stockholm. It calls on the Commission to update it annually before every Spring European Council so that effective progress can be assessed;
  • urges the Council and the European Parliament to adopt, as early as possible in 2002, the pending proposals for the final stage of the market opening of electricity and gas, including:
    • freedom of choice of supplier for all European non-household consumers as of 2004 for electricity and for gas. This will amount to at least 60% of the total market;
    • in the light of experience and at a date before the Spring European Council in 2003, a decision on ‘further measures’, taking into account the definition of public service obligations, security of supply and in particular the protection of remote areas and of the most vulnerable groups in the population;
    • separation of transmission and distribution from production and supply;
    • non-discriminatory access for consumers and producers to the network, based on transparent and published tariffs;
    • establishment in every Member State of a regulatory function, within the appropriate regulatory framework, with a view to ensuring in particular effective control of the tariff-setting conditions;
  • urges the Council to reach as early as possible in 2002 an agreement for a tariff-setting system for cross-border transactions in electricity, including congestion management, based on the principles of non-discrimination, transparency and simplicity;
  • agrees the target for Member States of a level of electricity interconnections equivalent to at least 10% of their installed production capacity by 2005. Financing requirements should be met mainly by the enterprises involved;
  • urges the adoption by December 2002 of the revision of the Guidelines and accompanying financial rules on Trans-European Energy Networks (TEN), and notes the intention of the Commission to present the report on the security of supplies based on the results of the debate generated by the Commission’s Green Paper on Security of Energy Supplies, in view of its next meeting in Seville;
  • invites the Commission and the Council to analyze at the Spring European Council in 2006 the global performance of the European internal energy market, in particular the degree of transposition of the regulatory framework, and its effects on consumer protection, infrastructure investments, effective integration of markets and interconnections, competition and environment.
The political progress made at the Spring European Council in Barcelona will not be translated into legislation immediately. The Common Positions on the relevant proposed legislation (proposals for a Directive amending Directives 96/92/EC and 98/30/EC concerning common rules for the internal market in electricity and natural gas, and for a Regulation on conditions for access to the network for cross-border exchanges in electricity) have not yet been adopted. However, as the European Council has urged an early adoption of these texts, it is likely that the institutions will endeavour to reach a Common Position by or at the next Energy Council meeting which is scheduled for 6 June 2002.

Thereafter, the Common Positions would be sent to the European Parliament for a second reading prior to the European Council’s final adoption of the Directive and Regulation.

For further information on this topic, please contact Robert Lane at robert.lane@cms-cmck.com or Amanda Seaton at amanda.seaton@cms-cmck.com or by on +44 (0)20 7367 3000.

"The Lisbon Strategy is the plan, formulated under Portugal's Presidency of the EU in 2000, for making Europe the world's most dynamic and competitive economic region over the next ten years"
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