WRITTEN QUESTION E-2880/02

by Giles Chichester (PPE-DE) to the Commission

(14 October 2002)

Subject: Energy liberalisation progress in the EU

There is much controversy and there are differing statistics as to the extent of liberalisation of the energy markets in the European Union's 15 Member States.

I would therefore be interested in knowing:

- what is the current level of energy market liberalisation in electricity and gas in the EU's Member States, specifically in France?

- what are the criteria used by the Commission to define a) the electricity and gas markets and b) liberalisation?

- what is the source and date of data used by the Commission to compile this information?

Answer given by Mrs de Palacio on behalf of the Commission

(22 November 2002)

The liberalisation of Community gas and electricity markets consists of the following measures:

- creating competition in the market for generation of electricity or the production or import of gas, and the development of transparent wholesale markets with several players,

- creating competition in the market for supplying gas and electricity to final customers, in particular by introducing and gradually extending the rights of customers to choose their supplier,

- separation of those parts of the business that are natural monopolies, that is transmission and distribution networks, with the introduction of specific regulation of the prices charges for the use of networks,

- integration of national electricity and gas markets by the adoption of harmonised rules for transmission tariffs and capacity allocation.

The Commission has recently published its second benchmarking report on the internal electricity and gas market(1), which is available on the DG TREN website: http://europa.eu.int/comm/energy/en/elec_single_market/index_en.html

This document is an up to date reference of the policies adopted in different Member States and some of the results currently being achieved.

Regarding the level of declared market opening, a table is extracted from the report showing the most recent information from October 2002 and is sent direct to the Honourable Member and to Parliament's Secretariat.

For France, the table shows that for both electricity and gas, the degree of declared market opening is at the minimum permitted by the current Directives. Furthermore, for gas, the opening of the market is purely the result of an informal agreement between the regulator and the main gas companies. The Gas Directive(2) has not been transposed into French law and the case is currently before the Court of Justice.

However, a declaration of market opening does not, of itself, make for a well functioning market. Ineffective regulation, potential cross subsidies, inadequate unbundling and market concentration may still mean that vertically integrated companies are able to frustrate the efforts of potential new suppliers.

An alternative indicator of the openness of a market in the process of liberalising is to examine the proportion of customers that have made use of their ability to switch supplier, or to renegotiate with the existing supplier. A table containing estimates of this parameter for, respectively, large users and then if relevant smaller commercial users and households is sent direct to the Honourable Member and to Parliament's Secretariat.

This table shows that, for electricity in France, around 10-20 % of the eligible customers have switched or renegotiated, which is only around 5 % of the total market. Similarly for gas, although 20-30 % of eligible customers have switched from Gaz de France (GDF), this is again around 5 % of the total market.

This information is based on estimates submitted by Member States' governments or national regulatory bodies and refers to the cumulative period since market opening. i.e. 1999-2002 for electricity and 2001-2002 for gas. In future, Eurostat is intending to encourage Member States to carry out an evaluation for individual years on a regular basis.

(1) SEC(2002) 1038.

(2) Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity OJ L 27, 30.1.1997.