WRITTEN QUESTION E-2567/01

by Antonios Trakatellis (PPE-DE) to the Commission

(21 September 2001)

Subject: Delay in liberalising the internal market in electricity and distortion of competition in Greece

There has been a considerable delay in the liberalisation of the energy market in Greece, leading to distortion of competition on the EU's internal market in electricity as a result of the interventionist policy pursued by the Greek state-owned electricity company, DEI, which has exploited its monopoly position in Greece to obstruct the opening of the market, thereby jeopardising energy sufficiency, when in the coming years there will be a need to increase the supply of electricity.

After being granted a two-year extension of the deadline to implement its obligations under Directive 96/92/EC(1) concerning common rules for the internal market in electricity, Greece was required, pursuant to that Directive, to have in place by March 2001 all the laws, regulations and administrative provisions for the liberalisation of the internal market in electricity:

1. Has the Greek legislation (Law 2773/99, Greek Government Official Gazette 286A, 22.12.1999, and Regulation B1498, 8.12.2000) concerning the liberalisation of the internal market in electricity been harmonised to comply with Community legislation and the provisions of the Treaties?

2, Is Greece in breach of Community legislation and what measures will the Commission take to ensure that competition takes place on equal terms and that the rules on the opening of the markets operate in transparent fashion?

3. Why has the Minister for Development not granted a single supplier's operating licence when numerous applications have been submitted and are simply piling up on the authorities' desks?

4. What does the Commission intend to do to uphold Community law and maintain the security, diversity and flexibility of supplies in Greece?

5. Are the network operator and the producer/distributor separate entities and what steps have been taken to separate the commercial interests of DEI from the operational activities of the network?

(1) OJ L 27, 30.1.1997, p. 20.

Answer given by Mrs de Palacio on behalf of the Commission

(26 October 2001)

1. and 2. Greece was required to implement Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity, by 19 February 2001, which it achieved through the adoption of Law 2773/99 on 22 December 1999. In addition, the Energy Regulatory Authority (RAE) was set up in June 2000 and a Transmission System Operator (DESMHE) was appointed in December 2000 (Presidential Decree 328/2000). Furthermore, some 15 pieces of secondary legislation have been adopted. Finally, on 19 February 2001, 6500 eligible customers were specified, equivalent to some 34.2 % of the market. As such, the Commission considers that Greece has complied with the requirements of Directive 96/92/EC. As with all Member States, the Commission constantly monitors the situation on the Greek market, to ensure continued compliance with the requirements of the Directive. No complaints have been received on this issue.

3. and 4. In order for real competition to develop in Greece, two actions are necessary. First, undertakings from other Member States have to have the effective ability to export to Greek customers. At the end of 2001 the Commission will publish a Communication on electricity and gas infrastructure which will, inter alia, address the question of the measures to be taken to fully re-connect Greece to the synchronously connected Community grid as rapidly as possible. In addition,

it is expected that the submarine electricity cable connecting Greece with Italy will enter in operation before the end of 2001. Second, independent, competing generation within Greece is a precondition for effective competition. To this end, the Energy Regulatory Authority (RAE) issued on 1 June 2001 six licenses to six consortia of independent private companies to construct generation plants with a total capacity of about 2 000 Megawatt (MW).

The achievement of security of supply, energy efficiency and diversification to various alternative fuels and energy sources is a declared policy of both the Commission and the Greek Ministry of Development; the introduction of natural gas and its use in electricity generation plants is contributing to this end, as well as the construction of wind farms and the promotion of other renewable sources of energy (e.g. through National Energy Conservation Agency (KAPE)). The recent construction programmes of new generation capacity of DEH are based on a variety of fuels for generation of electricity: natural gas, hydroelectricity and the traditional lignite.

5. With respect to the separation of the network operation activities, the scheme adopted by Greece is as follows: The Public Electricity Company (DEH) is split into four new entities, one of which is the owner of the electricity transmission network and responsible for its maintenance, development, extension and the construction of new lines.

Additionally, an independent Transmission System Operator has been established (DESMHE) as a joint-stock company, which is responsible for the management of the network, as well as its day-to-day operation, dispatching and planning of development of the network.

Whilst the Commission has some concern that the Transmission System Operator does not have direct control over the assets necessary to develop the network which would be obligatory under the new Commission proposals for completing the internal electricity market this situation is not per se an infringement of the present Directive. The Commisssion will, however, monitor carefully to ensure that DEH ensures that these services are available to the Transmission System Operator on a non-discriminatory basis.