EU Single market for energy

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EU Single market for energy
Expectations of the European industrial consumers
Peter CLAES President Ifiec Europe
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What is IFIEC Europe ?

• European federation of national federations of
  industrial energy consumers
• Issues
• Market liberalisation (electricity natural
  gas)
• Environmental aspects of energy policy
• European Climate Change Policy
• Renewables / nuclear energy / CHP /
• Energy taxation

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IFIEC Members
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1. Does the single market work ?

• Performance indicators
• How many users changed suppliers?
• Did prices fall or (at least) converge ?

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How many users changed suppliers ? (1998-2001,
Source DG Tren, Eurostat)
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Did prices fall or (at least) converge ?
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Did prices fall or (at least) converge ?
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Did prices fall or (at least) converge ?
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Did prices fall or (at least) converge ?
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2. What went wrong ?

• 2.1. Does unbundling work ?
• Accounting unbundling (Japanese Walls)
• Management unbundling
• Legal unbundling
• Ownership unbundling (Chinese Walls)

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2. What went wrong ?
2.1. Does unbundling work ? 2.2. The impact of
subsidiarity
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The impact of subsidiarity
Source Second benchmarking report DG Tren
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Source Second benchmarking report DG Tren
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2. What went wrong ?
2.1. Does unbundling work ? 2.2. The impact of
subsidiarity 2.3. Cross-border Transmission
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Cross-border Transmission

• 2.3.1. Suboptimal use of existing capacity
• e.g. Belgian-French border (electricity)
• available capacity app. 4.000 MW
• available for market 350-500 MW
• ULF peaks of gt 2.000 MW

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Cross-border Transmission
2.3.2. Lack of cross-border transmission capacity
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Cross-border Capacity Electricity
In of installed production capacity (Source DG
Tren)
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Cross-border Transmission

• 2.3.3. No efficient congestion management system
• no agreement within ETSO
• no efficient exchange of information between
  TSOs
• no single European CM-system
• re-dispatching
• auctioning
• rationing
• market splitting

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2. What went wrong ?
2.1. Does unbundling work ? 2.2. The impact of
subsidiarity 2.3. Cross-border
Transmission 2.4. Complexity of energy policy
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Complexity of energy policy

• European Climate Change Programme
• renewables
• CHP
• CO2-emissions
• nuclear energy ?
• financing of other policies (public services,
• local entities, )
• security of supply
• NIMBY-syndrome !

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3. Recommendations of Ifiec

• full ownership unbundling (Chinese walls)
• full market opening for all users
• publication of all relevant information by
  TSOs and regulators

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3. Recommendations of Ifiec

• Electricity
• cost-based, fair CBT financing mechanism
• (non-distance related, fair share to be paid by
• producer)
• non-discriminatory, transparent and efficient
  congestion management system (no auctioning)

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3. Recommendations of Ifiec

• Gas (gas-to-gas competition)
• cost-reflective and simple tariff structure
• non-discriminatory, cost-reflective access to
  gas infrastructures (incl. Storage, off-shore
  facilities)
• clear, non-discriminatory, transparent balancing
  rules (preferably daily balancing)
• capacity rights subject to use-it-or-loose-it