Piebalgs brushes off criticism of energy package

BRUSSELS - EU energy commissioner Andris Piebalgs has brushed off French and German criticism of Brussels' planned overhaul of the union's energy sector, saying it is fuelled by politically influential energy giants.

"It is political sensitivity", Mr Piebalgs, the main author of the most far-reaching shake-up of the bloc's energy sector yet, said in an interview with EUobserver.

"Big energy groups still have political weight in the countries and when they disagree, the political response is – we should defend them...how dare you endanger our energy champions", Mr Piebalgs added.

The commissioner's comments come in response to public objections from Paris and Berlin particularly concerning Brussels' aim to split up energy firms' production and transmission wings – something known as full ownership unbundling.

The idea, unveiled in proposals last week, is seen by the commission as key to introducing competition to the energy sector, as control of both supply and transmission makes it harder for new entrants to enter into the market.

Mr Piebalgs urged EU capitals to give up their blind protection of national titans, saying "we should work in the spirit that there are no national champions, but European champions in the European market".

"The proposal is an absolute necessity for the internal market to function", he said, pointing to a series of positive reactions from reputable economists.

Member states' diplomats are likely to continue wrangling over the new energy proposals when their representatives meet on Tuesday (25 September). But Mr Piebalgs is confident the debate will move from being political to being more constructive.

So far, France, Germany and Austria have been the most vocal opponents of unbundling, although they seem less hostile to an alternative scenario – the so-called independent system operator.

Under this option, big energy companies would have to hand managing control over transmission networks to an entirely separate operator, but would be able to retain the ownership of their network assets.

On the other hand, several countries – such as the UK, Ireland, Sweden, Denmark, the Netherlands, Belgium, Latvia and Spain – have thrown their support behind the more radical asset break-up idea.

Russia

The energy commissioner also defended the proposed set of restrictive measures on foreign energy bidders – or the Gazprom clause as they have quickly become known – in the face of Moscow's criticism.

Last week, Konstantin Kosachev, head of Russia's parliamentary committee for international affairs criticised the commission proposals and threatened political retaliation.

"In the same way they [the EU countries] are going to try to stop us entering market sectors of the western European economy, we will have to limit access for our foreign partners to the corresponding strategic sectors of the Russian economy", he said.

But Mr Piebalgs rebuffed Mr Kosachev's remarks. "Why is he saying that?", the commissioner asked, pointing out that Russian legislation currently prevents Europeans from fully expanding in its territory.

"We would, for example, like to have a third-party access to Gazprom pipelines", he pointed out.

According to the commissioner, the new rules are tailored to guarantee fair competition between foreign to home-grown firms and ultimately to clarify and stabilize energy relations between the 27-nation bloc and Russia, as currently, many things are "loose...and there is a suspicion somebody will take us over".

"We are giving the exact answer that is needed to the EU and Russia," said Mr Piebalgs urging both sides not to be so suspicious of each other.

Under the proposed rules, foreign buyers who wish to purchase an EU network will have to follow the same unbundling requirements as the union's own firms.

In addition, third countries as well as their individuals would not be able to acquire control over an EU transmission network unless there is agreement between the EU bloc and the companies' country of origin.

"It would be much worse if at some stage one country made some limitation for imports from Russia or for the networks", Mr Piebalgs said, adding "it's better to have clear-cut relations on investments between the EU and Russia and in the EU they could invest in reciprocal conditions".