WRITTEN QUESTION E-0720/02

by Erik Meijer (GUE/NGL) to the Commission

(15 March 2002)

Subject: Losses during long-distance electricity transmission and distribution and financial instruments to deter such losses

1. Is the Commission aware that there are considerable losses during long-distance electricity transmission, which increase with increasing transmission distance, that any voltage conversion in transformers also produces losses and that consequently, for example, energy distributors in the Netherlands, which import as much lower-cost electricity as possible from France and Germany, lose 5 billion kWh each year, or 5 % of total domestic energy consumption?

2. Does the Commission think it desirable to limit such transmission losses, with a view to optimising the balance between the environmental impact of electricity generation and the available quantity of electricity?

3. Does the Commission see scope for limiting electricity losses through better matching of power station locations and locations of energy-intensive businesses and by improving the quality of the electricity grid?

4. Does the Commission see scope through electricity transmission pricing at present, the same rate applies to both short and long distances to limit distance and thus deter the emergence of predictable transmission losses?

5. Does the Commission view the possibility, advocated by the Dutch research institute Nyfer, of extending the present regulatory energy tax, or ecotax, levied on small-scale electricity consumers to transmission operators and distributors which waste energy as a practicable way of deterring transmission losses?

6. What scope does the Commission see to encourage the Member States, under the present directive, to adapt their taxation system and rates for electricity transmission?

7. What other specific initiatives is the Commission taking to further limit transmission losses within electricity distribution?

Source: De Stem newspaper, 21.2.2002

Answer given by Mrs de Palacio on behalf of the Commission

(25 April 2002)

1. The Commission is aware that losses are an inevitable part of electricity transmission and distribution.

2. The Commission thinks it is desirable to limit transmission losses. It is primarily for national transmission and distribution system operators to take appropriate measures to reduce losses, within the regulatory framework set by national legislation and national regulatory authorities. Furthermore, in the context of the European Electricity Regulatory Forum, concrete progress is being achieved in ensuring that a European tariff system for cross-border transactions provides for costs from electricity transmission, including losses, are reflected accurately and imposed on those causing these costs.

3. The amount of losses can be reduced by improving the quality of the electricity grid and, according to the information available to the Commission, a substantial part of the network investments of national transmission operators is targeted at reducing losses. An improved match between power generation and consumption could also contribute to a reduction of losses.

4. As mentioned above, a reduction of losses can be encouraged by providing locational signals through network access tariffs, thereby discouraging the establishment of new generation or consumption at locations where network losses would be particularly high. The Commission, in its proposal for a Regulation on conditions for access to the network for cross-border exchanges in electricity(1), has suggested in Article 4 with regard to national access charges that where appropriate, the level of the tariffs applied to generators and/or consumers shall provide locational signals, and take into account the amount of network losses and congestion caused.

5. The Commission believes that all possibilities to reduce losses should be constructively considered and the Commission encourages all efforts in this respect. As long as there is no Community framework for energy taxation in place, energy taxation is a matter of subsidiarity provided that the general rules of the EC Treaty, such as those on state aid, are respected.

6. The electricity directive does not contain rules on electricity taxation. The Commission proposed a Community framework for energy taxation in 1997, which has, however, not yet been adopted by the Council.

7. In the Communication of European energy infrastructure a number of actions are proposed in order to increase the efficiency of the use of the existing energy infrastructure(2). Furthermore, under the European research framework programmes there are also many projects about reducing transmission and distribution losses.

(1) OJ C 240 E, 28.8.2001.

(2) COM(2001) 775 final.