Opinion on:

- the Commission Communication to the European Parliament and the Council on Community guidelines on trans-European energy networks,

- the proposal for a European Parliament and Council Decision laying down a series of guidelines on trans-European energy networks, and - the proposal for a Council Decision laying down a series of measures aimed at creating a more favourable context for the development of trans-European networks in the energy sector (1) (94/C 195/13)

On 21 February 1994 the Council decided to consult the Economic and Social Committee, under Article 129 b, c and d of the Treaty establishing the European Economic Community, on the abovementioned proposals.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 13 April 1994. The Rapporteur was Mr Gafo Fernández.

At its 315th Plenary Session (meeting of 27 April 1994), the Economic and Social Committee adopted the following Opinion unanimously.

1. Introduction

1.1. Trans-European energy networks (TEN) were acknowledged in the Treaty on European Union as forming the backbone of the internal market and contributing to economic and social cohesion.

1.2. Specifically, Article 129c states that the Community shall establish common guidelines, implement any measures necessary to ensure the inter-operability of the networks and the harmonization of technical standards, and may support projects of common interest financially.

1.3. The Committee has had the opportunity to express its views on the importance which it attaches to these trans-European networks in constructing an internal market in electricity and gas (1).

1.4. Although some of the planned measures have a national rather than a Community dimension, it is clear that integration of the energy systems means that a common approach is needed to such aspects as cost and security of supply, quality of service, quality of the environment, and economic and social cohesion. For this reason the Committee believes that such measures are justified, although it recognizes that it is the responsibility of the Member States to approve their development and contribute to their funding.

1.5. The Committee considers that the transport of energy is only desirable if it fulfils the functions mentioned earlier; it is also aware that it entails substantial investment in infrastructure, loss of energy in transport and conversion, and harm to the environment. Hence the criteria governing the development of trans-European energy networks should aim to make the best overall use of the networks in order to achieve the aforementioned objectives, with the minimum necessary expansion of the networks and avoiding as far as possible any unnecessary flows of energy.

2. Summary

The Committee welcomes the draft Decisions, considering them to be a necessary step in developing the internal energy market, improving the quality and security of supply of electricity and natural gas, and making it possible for remote and island regions of the European Union to be provided with adequate supplies at reasonable prices.

The Committee feels that it would help if the present proposals were accompanied by an in-depth study of the global impact of these new networks, and an examination of their social implications, especially in the case of projects which are potentially eligible for support from the Structural Funds and should therefore receive priority.

3. General assessment of the proposals

3.1. Broadly speaking the Committee approves the draft Decisions presented by the Commission as a step forward in the implementation of the principles laid down in the EU Treaty.

3.2. The proposed legal framework is based on two separate but closely linked Decisions and on a Financial Regulation proposed by the Commission. The Committee wonders whether these legal arrangements are the most appropriate or whether it would be better to incorporate the Regulation in the second of the Decisions which refers to the specific measures to be adopted.

3.3. The Committee would in any event make the following comments:

3.3.1. General comments on the proposal for a Decision laying down a series of guidelines on trans-European energy networks

3.3.1.1. The Committee considers that the objectives defined in Article 3 are not entirely in accord with Article 4 in which the priorities are set. Specifically, the priorities for economic and social cohesion are missing since the list drawn up by the Commission concentrates, especially in the electricity sector, on the development of the internal energy market and improved security of supply.

3.3.1.2. The Committee does not endorse the criterion of 'economic viability' listed in the third indent of Article 6(1). Although this is defined more precisely in paragraph 6 of this Article, the key criterion for assessing projects likely to be eligible for financing from the EU Structural Funds should be 'economic and social viability'. This is further highlighted by the fact that Community action is subsidiary, especially as regards financing, to Member State action; it is for the latter to propose and approve projects and it is they who are best placed to assess their overall cost-effectiveness.

3.3.1.3. The 'economic and social' viability should become evident from a 'fiche d'impact' (statement on impact) which would catalogue all the implications of the creation of such networks, and be drawn up as far as possible in conjunction with the economic and social forces concerned.

3.3.1.4. The Committee also considers that the development of such networks must not be tied to the development of the internal market in these sectors, must not interfere with the activities of firms already operating in the electricity and natural gas sectors, and must not distort competition between these firms.

3.3.1.5. The ESC considers that the committee set up under Article 7 of the guidelines Decision (hereinafter referred to as the technical committee) should be confined under this Decision to approving the projects of common interest submitted by the Commission and/or the Member State concerned. It also regards the period of one month for the Council to take a different Decision where the Commission's opinion does not coincide with that of the technical committee as inadequate; it should be extended to three months.

3.3.1.6. The Committee further considers that Article 6(3) should be redrafted to stipulate that the prior approval of only one Member State is necessary where the project concerns this Member State alone. In the event that two or more Member States are involved and there is no agreement on the suitability of the project, the technical committee, acting on a proposal from the Commission, will have to submit to the Council its decision on the suitability or otherwise of the project.

3.3.1.7. The Committee welcomes the indicative list of projects of common interest appended to the Decision, all the more so as adequate procedures for extending or revising it have been provided.

3.3.2. General comments on the proposal for a Decision laying down a series of measures aimed at creating a more favourable context for the development of trans-European networks in the energy sector

3.3.2.1. The Committee approves this Decision although it regards it as suffering from a lack of precision with regard to the duration of the operation and the calculation of the total Community financial commitment.

3.3.2.2. This is all the more glaring as the financial statement appended to the proposal stipulates the period of application as 1994-1999, mentions the estimated total investment required to fund these networks and indicates the amount of the Community's contribution. The Committee considers that this information should be included in the legal body of these proposals and not solely in the relevant Financial Regulation. The Committee nevertheless considers that the funds provisionally proposed are insufficient.

3.3.2.3. The Committee approves all the measures provided for in Article 2 and would merely like to stress the importance of effective technical cooperation between network operators in the light of the new approach to the internal market in electricity and natural gas presented by the Commission, namely the proposed establishment of 'negotiated TPA' and a system of arbitration between parties as the core of the new proposals (1). For this reason it considers that a prior assessment should be made of repercussions on the internal energy market before any specific cooperation projects are approved in this field.

3.3.2.4. The Committee only partially approves the proposed financial measures. It accepts the measures proposed in the first paragraph of Article 3 concerning general financial support, but considers that the second paragraph, which deals with intervention from other Community structural funds, should give greater emphasis and priority to the trans-European networks. This is because it is precisely those projects with a greater input to economic and social cohesion which may be less economical in cost-benefit terms and hence more difficult to carry through. The Committee hopes that the Commission and the Member States will take these comments into account when drawing up the Financial Regulation on the trans-European energy networks.

3.3.2.5. In the Committee's view the technical committee provided for in Article 4 should clearly define the operating rules laid down in the guidelines proposal commented on earlier.

3.3.2.6. The Committee welcomes the submission of a report every two years on the practical implementation of these Decisions.

4. Specific comments

4.1. Specific comments on the proposal for a Decision laying down a series of guidelines on trans-European energy networks

4.1.1. Sixth recital ('whereas') of the preamble

Replace 'potential economic viability' by 'economic and social viability'.

4.1.2. Article 2(1)

Add at the end of the first indent: 'projects with a voltage of less than 220 kV might, by way of exception, be acceptable, provided they are a part of isolated island systems'.

4.1.3. Article 4(1)

Add: 'and the development of networks in regions where there is an insufficient coverage'.

4.1.4. Article 6(1)

Amend the third indent to read as follows: 'it responds to a need and displays potential economic and, where appropriate, social viability to be confirmed'.

4.1.5. Article 6(3)

Add at the end: 'Where this is not the case, the Council, acting in accordance with the procedure laid down in Article 7, shall assess the suitability of its inclusion.'

4.1.6. Article 6(6)

Add at the end: 'This analysis shall be carried out by the Member States via a 'fiche d'impact' (statement on impact) in which all the social and economic organizations concerned have their say.'

4.1.7. Article 7(2), second paragraph

Replace 'one month' by 'three months'.

4.2. Specific comments on the proposal for a Council Decision laying down a series of measures aimed at creating a more favourable context for the development of trans-European networks in the energy sector

4.2.1. Article 3(2)

Replace 'shall take account of the projects of common interest ...' by 'give priority consideration to the projects of common interest ...'.

Done at Brussels, 27 April 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) OJ No C 72, 10. 3. 1994, p. 10-15.

(2) OJ No C 73, 15. 3. 1993, p. 31.

(3) COM(93) 643 final.