september 10, 2003svse 2003 - praha1 eu single market for energy expectations of the european...
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September 10, 2003 SVSE 2003 - Praha 1
EU Single market for energy
Expectations of the European industrial consumers
Peter CLAESPresident Ifiec Europe
September 10, 2003 SVSE 2003 - Praha 2
What is IFIEC Europe ?
European federation of national federations of industrial energy consumers
Issues :• Market liberalisation (electricity – natural gas)• Environmental aspects of energy policy
• European Climate Change Policy• Renewables / nuclear energy / CHP / …• Energy taxation …
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IFIEC Members
EU-membersEU-members Future EU-Future EU-membersmembers
MembersMembers D – F – GB D – F – GB
B - NL – IRLB - NL – IRL
I – GR – SFI – GR – SF
A – PA – P
HH
Non-membersNon-members S – DK – LUXS – DK – LUX
E (?)E (?)
CZ – EST – LV CZ – EST – LV
LT – PL – SLOLT – PL – SLO
SK – M – CYSK – M – CY
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1. Does the single market work ?
Performance indicators:
How many users changed suppliers? Did prices fall or (at least) converge ?
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How many users changed suppliers ? (1998-2001, Source: DG Tren, Eurostat)
ElectricityElectricity
IndustrialIndustrial
ElectricityElectricity
DomesticDomestic
GasGas
IndustrialIndustrial
GasGas
DomesticDomestic
AustriaAustria 20-30%20-30% 5-10%5-10% <2%<2% Not eligibleNot eligible
BelgiumBelgium 2-5%2-5% Not eligibleNot eligible ?????? Not eligibleNot eligible
FranceFrance 10-20%10-20% Not eligibleNot eligible 20-30%20-30% Not eligibleNot eligible
GermanyGermany 20-30%20-30% 5-10%5-10% <2%<2% <2%<2%
ItalyItaly >50%>50% Not eligibleNot eligible 10-20%10-20% 2-5%2-5%
NetherlandsNetherlands 20-30%20-30% Not eligibleNot eligible 30-50%30-50% Not eligibleNot eligible
SpainSpain 10-20% 10-20% Not eligibleNot eligible 20-30%20-30% Not eligibleNot eligible
UKUK >50%>50% 30-50%30-50% >50%>50% >50%>50%
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Did prices fall or (at least) converge ?
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Did prices fall or (at least) converge ?
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Did prices fall or (at least) converge ?
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Did prices fall or (at least) converge ?
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2. What went wrong ?
2.1. Does unbundling work ?
• Accounting unbundling (“Japanese Walls”)
• Management unbundling
• Legal unbundling
• Ownership unbundling (“Chinese Walls”)
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2. What went wrong ?
2.1. Does unbundling work ?
2.2. The impact of subsidiarity
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The impactof subsidiarity
Source : Second benchmarking report DG Tren
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Source : Second benchmarking report DG Tren
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2. What went wrong ?
2.1. Does unbundling work ?
2.2. The impact of subsidiarity
2.3. Cross-border Transmission
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Cross-border Transmission
2.3.1. Suboptimal use of existing capacity
• e.g. Belgian-French border (electricity)
• available capacity : app. 4.000 MW• available for market : 350-500 MW• ULF : peaks of > 2.000 MW
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Cross-border Transmission
2.3.2. Lack of cross-border transmission capacity
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Cross-border Capacity ElectricityIn % of installed production capacity (Source: DG Tren)
Potential Potential competition competition from importsfrom imports
Market share Market share of Top 3 of Top 3 producersproducers
AustriaAustria 21%21% 45%45%
BelgiumBelgium 25%25% 96%96%
FranceFrance 12%12% 92%92%
GermanyGermany 11%11% 64%64%
ItalyItaly 14%14% 69%69%
NetherlandsNetherlands 19%19% 59%59%
SpainSpain 4% 4% 83%83%
UKUK 3%3% 36%36%
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Cross-border Transmission
2.3.3. No efficient congestion management system
• no agreement within ETSO• no efficient exchange of information between TSOs• no single European CM-system
• re-dispatching• auctioning• rationing• market splitting
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2. What went wrong ?
2.1. Does unbundling work ?
2.2. The impact of subsidiarity
2.3. Cross-border Transmission
2.4. Complexity of energy policy
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Complexity of energy policy
• European Climate Change Programme• renewables• CHP• CO2-emissions• nuclear energy ?
• financing of other policies (public services, local entities, …)
• security of supply
• + NIMBY-syndrome !
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3. Recommendations of Ifiec
• full ownership unbundling (Chinese walls)
• full market opening for all users
• publication of all relevant information by TSOs and regulators
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3. Recommendations of Ifiec
Electricity
• cost-based, fair CBT financing mechanism(non-distance related, fair share to be paid by producer)
• non-discriminatory, transparent and efficient congestion management system (no auctioning)
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3. Recommendations of Ifiec
Gas (gas-to-gas competition)
• cost-reflective and simple tariff structure
• non-discriminatory, cost-reflective access to gas infrastructures (incl. Storage, off-shore facilities)
• clear, non-discriminatory, transparent balancing rules (preferably daily balancing)
• capacity rights subject to “use-it-or-loose-it”