The European Commission has lost its fight to force the unbundling of integrated energy companies following an agreement by EU energy ministers to adopt a compromise proposal put forward by France and Germany.
The agreement would allow large integrated energy utilities such as France’s EDF to retain ownership of their network grids. It is based upon a compromise hammered out between the European Commission and eight EU member states after they submitted a “Third Way” proposal on energy liberalisation.
Under the deal, utilities would have to leave the management of their gas and electricity grids to an independent transmission operator (ITO) that has decision-making rights over network operation. Other details of the model still need to be finalised.
At the meeting of EU energy ministers in early June, other elements of the European Commission’s energy liberalisation package were agreed, including the creation of a new independent European energy regulatory agency.
The Commission will review the agreed liberalisation model two years after the Directive comes in to force. It had proposed in September 2007 that utilities should sell off their networks, or alternatively hand over their operation and management to an independent system operator, in order to increase competition in the region’s energy markets.
Germany, France and six other member states opposed the Commission’s proposals and tabled the so-called Third Way option earlier this year.