Electricity liberalisation "must be hastened"

Study says full market opening needed within five years to ensure sector sustainability

The EU's electricity market must be liberalised more quickly than is currently planned if the sector is to achieve sustainable development, according to a new report. Authored by Germany's Öko-Institut and published by the Heinrich Böll foundation with environmental group WWF, the paper says a fully open market with complementary rules to aid clean electricity generation must be established within five years.

In the short term, it says, the EU needs to pass proposals such as the draft renewables directive, a cogeneration directive, and a framework directive on electricity demand reduction. These should be accompanied by stricter guidelines governing fuel imports, to ensure it is greener. In the long-term, it says, the EU should add a chapter on energy to the EU treaty. Long resisted, because most EU states see energy policy as a sensitive domestic matter, the authors say the move would allow better integration of environmental concerns.

Clean energy operators, and in particular cogeneration plants, complain that the EU's step-by-step approach to opening its electricity markets has crippled their ability to expand (ENDS Daily 7 March). A two or three-year time lag between the onset of liberalisation and measures to support clean energy can leave the sector vulnerable to falling prices and simultaneously facing obstacles to grid access.

Addressing a seminar held in Brussels yesterday to present the study, a European Commission official admitted that the gradual approach had been a "disaster". The Commission is reported to be considering making proposals to open the market fully by 2004, but in reality several EU countries are not planning full liberalisation before the end of this decade, while France has yet to make any substantial changes at all to its monopolistic energy supply structure.

Follow Up:
Öko-Institut, tel: +49 30 28 04 86 80; Heinrich Böll Foundation, tel: +49 30 28 53 40; WWF European Policy Office, tel: +32 2 743 8800. The report can be ordered from the Heinrich Böll website.

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