Germany criticises EU energy liberalisation plans

Germany has criticised the latest plans by the European Commission on how to split giant energy companies so that they do not control both supply and distribution.

In an interview with German daily Handelsblatt, energy commissioner Andris Piebalgs indicated Brussels wants to force companies to give up their hold over distribution networks through an asset split.

Under this proposal energy concerns such as Germany's E.ON or France's EDF would be divided into two legally independent companies, one in charge of production, the other of distribution.

Shareholders would maintain their current level of shares in both companies. "Shareholders will not lose out with this solution," Mr Piebalgs told Handelsblatt.

However, the German government, one of the strongest opponents along with France of Brussels' attempts to introduce competition to the sector, has hit back at the commission.

"The commission is determined to unbundle the legal ownership of energy companies," energy state secretary Joachim Wuermeling told FT Deutschland.

"The problems of unfettered access to networks and the cross-border network connections will not be solved with this."

He went on to note that after an asset split, the same shareholders with the same economic interests will be the owners of energy production and network services.

"One could ask what would be gained by this," said Mr Wuermeling.

Discussions on the issue are set to heat up once more in September when Mr Piebalgs publishes a commission legal proposal on unbundling.

Liberalisation of the energy sector is one of the main tasks this commission has set itself, seeing it as a way of ensuring lower prices for consumers.

The move is part of an overall plan to diversify energy sources, cut green house gas emissions and boost competition in the face of unpredictable Russian oil and gas supplies and concern about global warming.