WRITTEN QUESTION E-4134/97 by Konstantinos Hatzidakis (PPE) to the Commission (21 January 1998)

Subject: Clarification of Directive 96/92

Could the Commission clarify the following points concerning Directive 96/92 ((OJ L 27, 30.1.1997, p. 20. )) ('Common rules for the internal market in electricity')?

1. Given that the new independent producers need at least 3 to 4 years preparation to be able to take part in the opening up of the electricity market, does the Commission not think that the deadline laid down in Article 27(1) together with Article 19(1) of Directive 96/92 is extremely tight and therefore discriminates in favour of already established and developed electricity producers and, if so, what measures will it take to remedy this situation which is clearly prejudicial to free and fair competition?

2. From a purely technical point of view, natural gas is the only fuel that independent producers are able to use in a competitive environment because it is economical and environment-friendly. Would the Commission, therefore, say whether the Directive on the liberalization of the natural gas market will contain specific provisions to the effect that any derogations granted to Member States in relation to the opening of that market shall not apply in cases where electricity is generated with the use of natural gas by independent producers, who shall be subject to the provisions of Directive 96/92?

3. Is it permissible to set up electricity plants belonging to Community enterprises in countries which are not members of the Union in order to supply eligible customers within the meaning of Directive 96/92 with the electricity so generated?

Answer given by Mr Papoutsis on behalf of the Commission (6 March 1998)

1. The Honourable Member raises some reservations concerning the time limit provided in Article 27(1) in relation to Article 19(1) of the Directive 96/92/EC of the Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity as being rather strict and not, therefore, allowing independent producers to prepare themselves in order to participate in the opening of the electricity market. Article 27(1)(2) provides for the timetable for transposition of the directive which is given to Member States for

bringing into force their laws, regulations and administrative provisions necessary to comply with the directive. Article 19 defines the calculation of the market share for 40 gigawatthours (Gwh) final customers, and Member States must specify those customers inside their territory representing this share which have the legal capacity to contract electricity. This provision does not discriminate against independent producers and the requests the Commission has received so far by independent producers were based on their wish to open up the markets in the electricity sector as quickly as possible in order to allow them to profit from the benefits of an open market. In addition, the directive itself does not discriminate at all against independent producers. On the contrary, it provides that even if Member States have opted for the tendering procedure for the opening up of generation to competition it must be possible for independent producers to obtain authorisation for the construction of new generating capacity. Furthermore, with regard to the organisation of access to the system both under the third party access (TPA) system and the single buyer system, Member States should make sure that electricity producers, including independent producers, have access to the network in order to conclude supply contracts with eligible customers.

2. The derogations contained in the text of the draft gas directive, upon which the Council reached a common position on 8 December 1997, allow a Member State, under certain specific circumstances, not to apply some provisions of the directive. The aim of the derogations is to guarantee a specific protection in certain cases such as protection for gas undertakings in case of serious economic and financial difficulties with take-or-pay commitments, or in Member States where gas has been introduced recently and huge investments need to be recovered. In the first case, derogations will be granted on a case by case basis, and the Commission will play a decisive role. In the second case, which concerns particularly Greece and Portugal, the derogation will automatically expire after ten years from the first delivery of natural gas into the Member State. These derogations are not linked to a particular class of customers.

3. Directive 96/92/EC applies only to the territory of the Community. Thus the provisions of the directive concerning the construction of new generating capacity based either on the authorisation or the tendering procedure apply only to undertakings established in Member States. With regard to the tendering procedure Article 6(3) of the directive explicitly requires that details of the tendering procedure shall be published in the Official journal and the tender specifications shall be made available to every interested undertaking established in the territory of a Member State. With regard to imports of electricity into the Community from third countries, these should be treated under international law, such as the General agreement on tariffs and trade and World trade organisation (GATT/WTO) agreements, and not in the framework of the directive.