COMMON RULES FOR THE INTERNAL MARKET IN
ELECTRICITY AND NATURAL GAS
Commission Communication on completing the internal energy market.
Draft Council Directive amending Directives 96/92/EC and 98/30/EC concerning common rules for the internal market in electricity and natural gas.
Draft Council Regulation on conditions for access to the network for cross-border exchanges in electricity.
||(b) Articles 47(2), 55, 95 and 251 EC; co-decision; qualified majority voting
(c) Articles 96 and 251 EC; co-decision; qualified majority voting
||Trade and Industry |
|Basis of consideration:
||SEM of 19 November 2001
|Previous Committee Report:
||HC 152-iii (2001-02), paragraph 1 (31 October 2001)
|To be discussed in Council:
||No date set|
||For debate in European Standing Committee C, together with the Commission Green Paper on security of energy supply (decision reported 31 October 2001)
3.1 As part of the drive to complete the Single
Market, the Council adopted in 1996 Directive 96/92/EC
setting out common rules for the internal market in electricity.
In addition to laying down general rules for the organisation
of the sector, it contained a number of more specific provisions
governing generation, transmission and distribution systems, the
and transparency of the accounts of vertically integrated concerns,
and access to the system (where Member States were required to
ensure at least a "significant" opening of their markets).
Two years later, a comparable measure (Council Directive 98/30/EC)
was adopted for the internal market in natural gas, though the
market access targets were set slightly lower.
3.2 In March 2001, the Commission put forward
the current documents, comprising a Communication (in which it
analyses the way in which these two measures have operated to
date), accompanied by proposals for a Directive and Regulation.
These reflect the findings in the Communication, with the former
further liberalising the rules applying nationally to access to
the supply networks for both electricity and gas, and the latter
laying down further conditions governing the network for cross-border
exchanges of electricity.
3.3 The content of these documents, and the issues
to which they give rise, are set out at some length in our Report
of 31 October 2001, which recommended that they be debated alongside
the Commission's Green Paper on the security of energy supply,
already recommended for debate in European Standing Committee
C. However, in view of the importance here of the views of the
other Member States, we said that it would be helpful if, before
the debate took place, the Minister could set out in a Supplementary
Explanatory Memorandum their reactions to the proposal and the
likelihood of it being adopted in its present form.
Supplementary Explanatory Memorandum of 19 November
3.4 In his Supplementary Explanatory Memorandum
of 19 November 2001, the Minister for Industry and Energy at the
Department of Trade and Industry (Mr Brian Wilson) says that the
majority of Member States support the main elements of the proposal,
but that France and Germany object to them in important respects.
3.5 France is resisting 100% market opening,
and will, at present, commit only to liberalising its industrial
and commercial sector. He says that the French have doubts as
to whether liberalisation would benefit domestic consumers in
France, and that the UK is working bilaterally with the Commission
to overcome those concerns. Germany is in favour of full market
opening, but objects to significant sections of the proposal,
particularly ex ante regulation, legal separation in the
gas industry, and published tariffs for access to networks. The
Minister says that these objections are "generally not supported"
by other Member States, although some also have concerns about
legal separation for gas. He adds that Germany is under considerable
pressure from the Commission and other Member States, including
the UK, to change its stance, and that there have been several
UK-Germany meetings at senior level in recent months to discuss
a way forward. He says that there are signs that Germany is becoming
more flexible, and that the Government is reasonably hopeful that
an acceptable compromise can be found.
3.6 Overall, the Government believes that the
objections of France and Germany will eventually be overcome,
and the proposal adopted in more or less its current form, although
the timetable may be rather more protracted than originally envisaged.
3.7 Since the debate recommended in European
Standing Committee C is to take place on 28 November, the information
provided in this Supplementary Explanatory Memorandum is timely,
and we are accordingly drawing it to the attention of the House.
11 OJ No. L 27, 30.1.97, p.20. Back
separation of the various elements within integrated businesses. Back
No. L 204, 21.7.98, p.1. Back