Spain and Italy accused of causing UK energy crisis
MARK BEUNDERMAN
28.11.2005 @ 09:46 CET
Spain and Italy are causing a gas crisis in the UK by keeping gas supplies to themselves, a UK regulator has warned.
British media report that Ofgem, a UK energy regulator, has urged the European Commission to investigate alleged dysfunctions in the EU gas market which it claims has caused a gas crisis in the UK.
The gas pipeline connecting the UK to the continent has only been running at half capacity (Photo: Notat)
UK gas prices have ballooned to around €2.50 a therm (the standard unit for measuring natural gas), while prices on the continent have remained much lower, with Germany reporting prices of around 1 euro a therm last week.
In spite of soaring British prices, the gas pipeline connecting the UK to the continent has only been running at half capacity, sparking calls from UK authorities for a Brussels probe into other member states' protectionism.
Ofgem wants clarification from Brussels as to "why the interconnector [pipeline] has not been flowing at full capacity when UK gas prices are much higher than prices in Europe", according to the Guardian.
The UK watchdog is concerned that Spain and Italy are restricting gas exports by their suppliers because of their country's policies to penalise suppliers who fail to meet domestic demand.
Wary of these penalties, Spanish and Italian companies are storing extra gas supplies for the domestic market, instead of selling gas to the lucrative UK market, Ofgem believes.
The commission itself earlier this month detected "serious malfunctions" in the working of the EU’s energy market.
Energy commissioner Andris Piebalgs and competition commissioner Neelie Kroes noted in a report that energy prices between member states differ substantially, and cross-border trade in energy is underdeveloped.
The commissioner slammed member states for not sufficiently implementing key EU legislation in opening up energy markets.
Mr Piebalgs stated "member states need to quickly and fully implement the gas and electricity directives not only in letter but also in spirit".
