Thursday

26th Apr 2018

Brussels drafts controversial energy 'unbundling' law

EU energy giants are coming one step closer to losing full control over their assets, with the European Commission pressing ahead with legal moves to break up major concerns into smaller pieces and saying it has the backing of member states.

Senior EU officials, speaking on condition of anonymity, confirmed that Brussels will table a piece of legislation which would force large energy companies to sell off part of their business in order to fully separate production and distribution.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • The European Commission is pushing EU energy giants to a full break-up from 2009 (Photo: gazprom.ru)

The so-called "ownership unbundling" is seen by Brussels as key to boosting competition and bringing down consumer prices.

The draft legislation is to be presented in July or September, EU officials said, arguing they had received a green light from EU leaders at the spring summit (8-9 March), which outlined new targets in the field of energy.

According to the summit conclusions, EU leaders approved "effective separation of supply and production activities from network operations, based on independently run and adequately regulated network operation systems which guarantee equal and open access to transport infrastructures and independence of decisions on investment in infrastructure."

They also agreed that any move towards unbundling should take account of the specific characteristics of the gas and electricity sectors and of national and regional markets.

The vague wording has once again proved right the old saying "the devil lies in the detail" however, as some EU capitals argue they have not committed themselves to any specific legal model yet.

"The summit did not call for ownership unbundling," one diplomat told EUobserver in response to the commission's legal plans, but added "it was not a surprising move," given that the EU's executive arm has been clear about its preference all along.

Member states themselves have been split into two camps on the issue, with, for example, the UK, Ireland and the Netherlands favouring the asset break up idea, but with France and Germany, home to energy giants EDF and E.ON, opposed.

During the summit, Austrian Chancellor Alfred Gusenbauer said that "property-oriented unbundling would not be a step in the right direction, given the current dependence on outside energy sources," adding "there is a danger of EU companies getting under control of extra-European forces."

Meanwhile, the commission seems to be taking full advantage of the EU states' wrangling, with its officials saying Brussels "is not going to give up the idea [of ownership unbundling] just because discussion has not finished yet."

Long legislative list

However, the proposal to unbundle EU energy companies is only one aspect, as Brussels foresees a long list of legislative steps following the adoption earlier this month of the energy-climate change package.

This year, for example, will see eleven different initiatives in the area of environment, eight in the energy field, two in competition and 13 initiatives falling under the external relations umbrella.

One of the most hotly awaited pieces of law - a directive on the use of renewable energy – is to be tabled in the third quarter of this year and will contain three chapters: on biofuels, on heating and cooling and on renewable electricity.

"The commission has a fair idea what is the renewable potential of each member state," EU officials said, but added the main task - how to get from six to a 20 percent share of green energies in overall EU energy consumption by 2020 – still needs to be figured out.

According to the commission, member states would not be given any medium term target but only one to be fulfilled by 2020. If they fail, the commission would start a regular infringement procedure.

EU shelves Macron idea for 'European Darpa'

The European Commission's new strategy on artificial intelligence contains nothing that resembles French president's idea for a US-inspired agency for disruptive innovation.

News in Brief

  1. UN expects over $4bn in pledges for Syria
  2. Commission wants more public data made available for reuse
  3. Study: Brexit will hit all European farmers
  4. European media face rise in 'verbal violence' from politicians
  5. Greenland PM to keep power despite poll slump
  6. Commissioner optimistic on FYROM name solution
  7. Italian court keeps NGO migrant rescue boat docked
  8. German Jews warned not to wear skullcap in public

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  11. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  12. UNICEFCalls for the Protection of Children in the Gaza Strip

Latest News

  1. Whistleblowers could be enforcers of rule of law in Europe
  2. EU shelves Macron idea for 'European Darpa'
  3. Don't play EU 'games' with military HQs, Italian admiral says
  4. EU had a plan for Jordan - now it's time to make it work
  5. Time for EU to take charge of global health research agenda
  6. EU in race to set global Artificial Intelligence ethics standards
  7. Juncker delays air quality action due to busy agenda
  8. Spain makes bid for EU naval HQ

Stakeholders' Highlights

  1. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  2. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  3. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  4. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  5. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  6. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia
  7. Mission of China to the EUChina and EU Must Work Together to Promote Global Steel Sector
  8. Swedish EnterprisesEU Tax Proposal on Digital Services Causes Concern for Small Exporting Economies
  9. European Jewish CongressCondemns the Horrific Murder of Holocaust Survivor Mireille Knoll in Paris
  10. Mission of China to the EUAn Open China Will Foster a World-Class Business Environment
  11. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  12. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan