WRITTEN QUESTION E-3501/01

by Erik Meijer (GUE/NGL) to the Commission

(8 January 2002)

Subject: State-subsidised cross-border trade in electricity and the lack of reserve capacity for emergencies

1. Can the Commission confirm that, although certain cross-border power lines were installed primarily for use in emergencies, the Netherlands makes full use of them even under normal circumstances to import 20 billion kilowatt-hours of electricity, equivalent to one fifth of domestic demand, so that if the Netherlands' domestic electricity production were unexpectedly to be interrupted, no additional imports would be possible to compensate temporarily for the shortfall?

2. Is the Commission aware that, in addition to the five existing power lines between the Netherlands and its two neighbours, the energy companies operating in the Netherlands and TenneT, the operator of the electricity grid, are establishing extra capacity for electricity imports by constructing a new line from Germany which could quickly increase import capacity by 25 % to 25 billion kilowatt-hours, or a quarter of domestic electricity demand?

3. To what extent is the Netherlands promoting these electricity imports by subsidising the generation of electricity from coal or lignite in Germany, which makes this electricity cheaper than electricity produced in the Netherlands?

4. Will the Commission seek the introduction of a ceiling on Member States' imports of electricity in order to prevent overloading of the interconnecting system?

5. Will the Commission seek the introduction of a ceiling on Member States' imports of electricity in order to prevent distortion of competition by state subsidies for production?

Source: De Volkskrant, 23 October 2001

Answer given by Mrs de Palacio on behalf of the Commission

(15 February 2002)

1. The Commission is not completely in agreement with the statement of the Honourable Member that cross-border lines were primarily installed for use in emergencies. In the concrete example of the Netherlands, for instance, certain lines were built, or capacity on the lines was increased, in order to allow for imports from neighbouring countries. This was a policy decision taken by the Dutch authorities instead of building more new generation capacity in the Netherlands itself. It is true that, at present, the import capacity of the Netherlands is being used intensively because of the existing price difference between the Netherlands and neighbouring countries. However, all Transmission System Operators operate the network and the interconnections under strict security standards. The lines are operated under the assumption that in case the biggest domestic electricity plant should shut down, no problems would occur in the supply of electricity, inter alia by calling in the help from neighbouring Transmission System Operators. In the concrete case of the Netherlands, Tennet was able to maintain safe operation of the Dutch network last year (2001) even in the event of disturbances, or generation shortage, in the range from 1 200 to 1 500 MegaWatt (MW). Help from neighbouring Transmission System Operators was called in, and could be provided without difficulty, as the security standards under which the interconnectors are operated allow for this assistance.

2. The Commission is aware of the fact that increase in interconnection capacity with Germany is under preparation. No new lines are being built at this moment, but on the Meede-Diele border crossing, new transformers ready by September 2003 will allow for an increase in import capacity of around 1 000 MW, effectively bringing the import capacity of the Netherlands to 25 % of domestic demand.

3. The aid granted to German coal production is granted according to the Community's state aid rules applying to the coal sector. These state aid rules are being applied without discrimination in the Community. The Netherlands is not seeking to promote this type of electricity generation by importing electricity from German suppliers, but seeks to buy supplies at competitive prices.

4. The Commission will not seek a ceiling on Member States' imports of electricity for reasons of security of the network. The Transmission System Operators operate the interconnected network according to strict security standards. The Commission does not consider it necessary to regulate this aspect of the business of transmission system operators.

5. In the framework of the internal market, imports between Member States can not be limited under normal circumstances. The only exception allowed for under the Electricity Directive, Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity(1) is that of reciprocity, meaning that Member States with a larger share of market opening can refuse certain imports from Member States with a smaller share of market opening. The issue the Honourable Member refers to concerns state aid to certain types of electricity production. State aid can be granted under certain conditions and has to be approved by the Commission, for instance in the case of indigenous coal production or renewables production. The state aid rules are applied without discrimination between Member States. The Commission will not therefore seek a ceiling on Member States' imports for reasons of state aid.

(1) OJ L 27, 30.1.1997.