Energy firms could get share of transmission networks

Energy-producing companies would be allowed to own small shareholdings in transmission networks under a compromise deal on liberalisation of EU energy markets being prepared by the Portuguese presidency.

The European Commission proposed in September that energy companies sell off their stakes in transmission operators, a process known as ownership unbundling, to avoid conflicts of interest.

But following strong opposition to this proposal from member states, including France and Germany, the Portuguese presidency is working on a compromise deal in which energy producers could retain minority shareholdings on transmission business. The compromise proposal will be discussed at a meeting of energy ministers in December.

Andris Piebalgs, the European energy commissioner, confirmed that the issue was under discussion following a meeting with Manuel Pinho, the Portuguese energy minister, on Wednesday (24 October). "The presidency is preparing a compromise solution where the Commission has some difficulties."

Piebalgs added: "Some countries have spoken about minority shareholding in ownership unbundling, but no one says ownership unbundling is bad or good."

The Commission is insisting that full ownership unbundling is the best way to ensure fair competition.

But some EU officials said that a less dogmatic approach to the issue could be productive, adding that that full ownership unbundling was not necessary, if there were strong legal safeguards in place to protect the independence of the network operator. "It is important you have independence. Otherwise we will lose what we are aiming for," said one official.

Another added: "The key is whether or not that stake gives you influence or control over the company."

Permitting a minority shareholding would help some countries sign up to the unbundling rules. Finland, for example, has unbundled its electricity and gas sectors but two Finnish power generators have small stakes in the grid operator.

The Commission considered including the possibility of minority shareholdings in the proposals it presented in September but decided against the move for tactical reasons. It expected that member states would ask for this measure if it helped them accept the overall package.

As part of the compromise, small or geographically isolated markets such as Malta, Cyprus and the Baltic states could be granted exemptions from the unbundling rules while countries which joined the EU recently, such as Romania and Bulgaria, could be given more time to adjust. This could help the Commission gather a qualified majority support in favour of its proposals.

Another possible element in a compromise is to take a different approach to unbundling in the gas and electricity markets. The Commission is opposed to different treatment for the two markets but a number of countries which have unbundled their electricity markets have not yet done so for the gas sector.

Officials say that member states hope to get a common position in June next year, after the European Parliament has reached its first reading opinion.

• The European Parliament has appointed five MEPs to draft reports on the five parts of the energy liberalisation package. Internal electricity market: Eluned Morgan (UK, PES). Internal gas market: Romano Maria La Russa (Italy, UEN). Agency for Co-operation of Energy Regulators: Renato Brunetta (Italy, EPP-ED). Cross-border electricity exchanges: Alejo Vidal-Quadras (Spain, EPP-ED). Access to gas networks: Atanas Paparizov (Bulgaria, PES).

Energy-producing companies would be allowed to own small shareholdings in transmission networks under a compromise deal on liberalisation of EU energy markets being prepared by the Portuguese presidency.

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