New optimism over electricity liberalisation

Date: 15/02/1996

By Fiona McHugh

ITALIAN efforts to break the deadlock over electricity liberalisation are beginning to pay off, according to Commission officials.

Delivering an upbeat account of this week's meeting of high-level energy experts, a spokesman for Energy Commissioner Christos Papoutsis said most member states had expressed support for the presidency's plan to open up an agreed percentage of the electricity market to competition.

But despite the Commission's optimism, fundamental differences of opinion still remain between the EU's liberalisers and protectionists.

Significantly, France, one of the countries responsible for blocking progress so far, was not moved by Italy's proposal. “There is no way we could agree to open a percentage of the market because then the Commission could easily increase it later,” explained one French diplomat.

Instead, Paris wants a tailored version of its 'single buyer' plan, which would limit liberalisation to large industrial users to guide the way.

That, however, is anathema to the bloc's liberalisers, such as the UK and Germany. They insist that the benefits of increased competition would only be felt by individual customers if distributors as well as large consumers were included in the deal.

Italy's suggestion that markets should be opened by between 22 and 40&percent; also failed to impress the UK and Germany.

Tiring of the two camps' intransigence, Papoutsis warned last week that if no progress had been made by 7 May, EU leaders would have to try to succeed where previously their ministers had failed at their next summit in June.

With that deadline looming, efforts to reach a deal have been intensified. So far, Italy has drummed up support from “a majority” of countries, but without the key players on board, that support is worth little.

The Council of Minister's working group on energy will meet on 26 February and 1 March to try to push the talks forward.