It’s time to complete the internal energy market

Popular TV program Salvados, displayed on channel La Sexta, dedicated on Sunday a full episode to the wicked situation of the Spanish energy market.

Within this very interesting program we choose to highlight the statement of Jorge Fabra, former member of the advisory board of the CNE (Spanish National Commission for Energy) who said, about the current Spanish electricity legislation: “The first reform that should be made is to cancel all existing rules and go back to the drawing board".

Besides being needed to resolve the structural problems which characterize the Spanish market, a reform of the energy sector is also necessary in order to comply with European regulation. The European Commission remarked that on Thursday 15 November by issuing a communication which urges member countries to take concrete action to complete the internal energy market by 2014.

The Commission will cooperate with Member States to implement European regulations governing the energy market in order empower consumers and to promote competition among energy utilities.

This communication came after the European Council had asked to complete the energy market in its conclusions to its 19 october meeting.

In February 2011 the EU Heads of State declared the need to complete the internal energy market, as defined in the 3rd energy market package (Directives 2009/72/EC and 2009/73/EC) which is considered the cornerstone of the integration of the gas and electricity market, before 2014.

Energy Commissioner Günther Oettinger said: "When it comes to gas and electricity, citizens and businesses are interested in two things – security of supply at any time and affordable price. We will best achieve this with a functioning European energy market."

To complete the EU internal energy market by 2014 the Commission foresees several actions. They include:

- Implementing internal market law and enforcing competition rules. Some Member States have not yet fully transposed the third energy market package. The Commission will continue pursuing infringement procedures to make sure relevant European rules are correctly implemented. Competition rules are to be enforced vigorously to ensure a level playing field for all market players.

- Empowering consumers. It is estimated that EU consumers could save up to EUR 13 billion a year if they switch to the cheapest electricity tariff available. The Commission will ensure that consumer rights enshrined in the EU legislation will be visible in national law and properly respected by all market players. 

Currently only 9 Member States (Austria, Czech Republic, Germany, Finland, Luxembourg, Netherlands, Slovenia, Sweden, and UK) do not have regulated retail energy prices in place. Thus all the others 18 EU member states still not comply with this fundamental requirement.

- Ensuring flexible market design. Some Member States are planning to support electricity producers for keeping available their generation capacity to ensure there is sufficient capacity also when variable sources of electricity, such as wind and solar power, are not producing. This is called capacity mechanism and should be implemented at a European level to be more cost effective.

In addition, the Commission will propose guidelines on support schemes for renewables that will enhance the effectiveness of the internal market.