ΥΠ.ΠΡΟ.ΠΟ
Πολυμέσα
Mr Christos Papoutsis, Member of the European Commission responsible for Energy, Unipede XXIV Congress on "Electricity on the Move"
 
 
 
Montreux, Switzerland 18-22 May 1997

Main Points of the Commissioner's Speech:

(...) "From the Commission's point of view, there are a number of issues which we need to carefully monitor during implementation (of the Electricity Directive).

Firstly, the Public Service Obligations. The Commission accepts that the existence of such obligations is justified. I firmly believe that Public Service Obligations can be fulfilled without any negative effect for the liberalization of the market.

Secondly, to the network, we need to monitor the functioning and the role of the Single Buyer. The Single Buyer should be seen as an intermediate agent between the generator and the consumer, but having no influence on the basic power trade.

Thirdly, we need to ensure as far as possible equitable treatment of eligible customers.

Finally, we need to ensure openness in transmission, a main pillar of an open market. The question of ownership of networks must not create obstacles." (...)

(...) "I would also like to stress once again the importance which the Commission gives to an unbiased and impartial transposition of the Directive into national law." (...)

(...) "I strongly believe that international cooperation in the energy field is of crucial importance for our energy future." (...)

(...) "Our cooperation with the Adhesion Countries, is also important that is, with the Visegrad countries, Rumania and Bulgaria." (...)

(...) "In the Mediterranean area, as you know, electrical interconnection projects either exist or will be realised and we may see in the not too distant future an electrical "Mediterranean Ring"." (...)

(...) The Directive on the common rules for the internal electricity market, and the Trans European Energy Networks will have paved the way for new types of energy markets. Internationally, the development of exchanges and markets will be greatly facilitated by the Energy Charter." (...)

(...) "I believe that a pre-requisite to creating better conditions for the energy industry is the improved cooperation on the basis of agreed Community energy objectives." (...)

(...) "I would personally go further than agreed objectives, and maintain that energy policy cannot play its full and rightful role in our sustainable economic development if it does not have a legal basis in the new Amsterdam Treaty.

I have made my views clear on this point. I hope that the electricity industry will support the idea of an energy title being adopted, as a result of the IGC process. I believe that it is in the industry's interest to have a stronger energy policy, established in the Treaty." (...)

Full Text:

Mr. Minister,

Mr. President,

Ladies and Gentlemen,

It is a great pleasure for me to address once again the UNIPEDE Congress and be with you today, here in Montreux. In a country, which plays an important role in the electricity network, and has high standards of environmental protection.

This is an occasion for us to exchange views on issues of common interest, at a period of major changes in the energy sector, and of reorganization within the electricity industry.

We all have to be prepared to face the new challenges that these changes will bring. We are faced with the introduction of the EURO, the liberalization of the energy markets, the imperative need to reconcile our activities with environmental protection.

Especially, in view of the Kyoto conference on climate change later this year. We also need to develop even more our cooperation with the outside world.

I would like to focus on some of the challenges facing the Electricity Supply Industry, related to, in particular, the development of the Internal Market for Electricity, and its effects.

After eight years of difficult discussions we now finally have a Directive, and are well on the way to an open market. Even before the adoption of the Directive, the process of discussion on liberalization brought about changes in thinking.

Compared with the late eighties, many developments, which were then unthinkable, are now generally accepted. Such as unbundling, which many companies have already put into effect in the form of profit centres.

The Directive in its final form was the result of a well balanced compromise. And I would like to thank the electricity supply industry for their contribution. I hope we will continue to cooperate in an open and constructive manner, in order to ensure the correct and rapid implementation of the Directive.

The gradual liberalization of the electricity market is a reality. And the electricity industry must adapt to the new situation.

From the Commission's point of view, there are a number of issues which we need to carefully monitor during implementation.

Firstly, the Public Service Obligations. The Commission accepts that the existence of such obligations is justified. Of course, we cannot accept that they will be used as pretext for the erection of new barriers to trade in electricity. I firmly believe that Public Service Obligations can be fulfilled without any negative effect for the liberalization of the market.

Secondly, to the network, which can be considered as the backbone of an open market. In this respect, we need to monitor the functioning and the role of the Single Buyer. The Single Buyer should be seen as an intermediate agent between the generator and the consumer, responsible for the actual power transport and supply, but having no influence on the basic power trade.

Thirdly, we need to ensure as far as possible equitable treatment of eligible customers. Depending on the definition of eligible customers by Member States, it may happen that two companies with only slightly differing electricity consumption will be treated differently. One effect of this could be pressure for further market opening.

Finally, we need to ensure openness in transmission, a main pillar of an open market. The question of ownership of networks must not create obstacles. The issues of the independence of the network operator, the calculation of the transmission fees and the definition of available transmission capacity must also be resolved.

All these and other pending items must be implemented in a fully transparent and non-discriminatory manner, if the internal electricity market is to function correctly.

I would also like to stress once again the importance which the Commission gives to an unbiased and impartial transposition of the Directive into national law, and to making the internal electricity market work in practice.

I was very pleased that all Member States accepted our invitiation to participate in a follow up group monitoring the transposition process. This group met for the first time last week. The results of this meeting are very promising. Of course, in parallel to the work of this group, we will continue our contacts with industry, consumers and other interested parties.

The internal market is a reality, which has already started to work in practice. For example, even though the Directive requires only limited changes in the structure of the companies, many of the electricity companies are already going further.

They are creating specific divisions or even subsidiary companies for generation, transmission and distribution. This would very much contribute to solving the problem of an independent transmission network operator, which I mentioned before.

But perhaps the most drastic change taking place in many utilities, is the recognition of the need to respond to customers by providing more energy services and more competitive prices.

I would now like to turn briefly to the international aspects of the opening of the electricity market, and of our energy policy in general. I strongly believe that international cooperation in the energy field is of crucial importance for our energy future. We need to reflect on how we can best work together with Switzerland, our host country.

Another European country with which we need to cooperate closely is Norway. Several undersea cables are planned between Norway and England, the Netherlands and Germany. They will allow a connection between the Scandinavian hydro power generation and continental Europe.

However, we have had already alarming signals that power export restrictions are planned in Norway as well as in Sweden, either to protect the domestic industry or to compensate for the decision of a European Union Member State to phase out nuclear energy.

Our cooperation with the Adhesion Countries, is also important that is, with the Visegrad countries, Rumania and Bulgaria. As you know, the CENTREL system, which links the four Visegrad countries is already interconnected with the UCPTE. The systems of Rumania and Bulgaria will be connected in the near future.

I understand that there are two problems to overcome for these connections. One is of a technical nature, and concerns the so-called "inter area oscillations". The other is more political, and is the presence of very low, subsidised electricity prices, which may become a serious issue for the European electricity markets. The same is true for possible imports of nuclear generated electricity.

The situation with the interconnections is of some concern if we look further to the East, that is to Russia, Belarus, Ukraine and Moldavia. We do not want to create an electrical "iron curtain" between the two large electrical systems, but the question of how to realise the interconnection between them is very difficult to answer.

I think that in this case your industry, and particularly the UCPTE, has a responsibility identify the issues and propose potential solutions.

In the Mediterranean area, as you know, electrical interconnection projects either exist or will be realised between Spain and Morocco, between Italy and Greece, as well as in the Maghreb and Mashrek region. If finally an interconnection between Greece and Turkey is made, we may see in the not too distant future an electrical "Mediterranean Ring".

In the Mediterranean Area we also have another development - the new gas pipeline from Algeria via Morocco to Spain, Portugal and later France. Together with the arrival of Russian gas in Greece, and increased gas imports of Italy, there will clearly be an affect on the European Union electricity market. Thus, in conjunction with the appearance of Independent Power Producers (IPPs) in the same countries, the traditional export / import patterns may become obsolete and new outlets will have to be found.

The Directive on the common rules for the internal electricity market, and the Trans European Energy Networks will have paved the way for new types of energy markets. Internationally, the development of exchanges and markets will be greatly facilitated by the Energy Charter. I strongly believe that its correct implementation will serve to protect energy investments and this must be of interest to the electricity industry.

The efforts towards an integrated liberalised electricity market and towards an open gas market have been the major focal points of our energy policy in my period as Commissioner. I hope that, we will shortly have a decision on the Directive on the liberalization of the gas market, in order to have the full combined benefit of a European energy market.

Mr. President,

I believe that a pre-requisite to creating better conditions for the energy industry is the improved cooperation on the basis of agreed Community energy objectives. Our proposals on how this cooperation can be strengthened will be discussed in the Energy Council next week, on 27 May.

I would personally go further than agreed objectives, and maintain that energy policy cannot play its full and rightful role in our sustainable economic development if it does not have a legal basis in the new Amsterdam Treaty.

I have made my views clear on this point. I hope that the electricity industry will support the idea of an energy title being adopted, as a result of the IGC process. I believe that it is in the industry's interest to have a stronger energy policy, established in the Treaty.

In our evolving energy policy, it is clear that we need to reconcile energy and environmental objectives.

As part of this approach, the Commission has placed particular emphasis on the promotion of renewable energy sources. We have adopted the Green Paper on promoting Renewable Energy Sources and a new ALTENER II Programme.

Before the end of the year, we will present a comprehensive strategy for renewables in the form of a White Paper and Action Plan. Renewables is an area where the potential for electricity and heat generation is considerably under-used.

These proposals are linked with another major issue. With our future policy concerning the prevention of climate change and the reduction in greenhouse gas emissions. Later this year, at the Kyoto Conference, the European Union, and our international partners, will need to make commitments to reduce our emissions. This will radically affect our policies in a number of areas, and in particular energy production and use.

The real challenge facing us is to adopt realistic emission reduction objectives, and effective policies in order to achieve them. And there are no easy answers, as to how to ensure that the Union will be able to fulful its commitments in a cost-effective way, in order to achieve the desired environmental result.

As a first concrete contribution to this reflection related to energy policy, the Commission adopted just last Wednesday on my initiative a Communication addressing the energy dimension of climate change.

The Communication's objective is to outline the challenge posed to energy policy makers, and to identify a number of areas of policy action.

If the proposed target of 12% for CO2 emission reduction and of 15% greenhouse gas emission, by 2010 as compared to 1990, is adopted in Kyoto, it must be clear to us all that there are many far-reaching implications. A major effort needs to be made throughout our economies.

In a complex and changing world, the electricity industry must also take seriously, and manage appropriately, its responsibilities.

Ladies and Gentlemen,

We are entering an exciting period of rapid developments in the energy sector.

The new developments represent a great challenge for your industry, but they also offer new opportunities. I have no doubts that the European electricity supply industry will rise to the challenge. I can assure you that the European Commission is ready for a mutually beneficial cooperation.

I look forward to our joint efforts to make the internal energy market a reality. I am convinced of the necessity to involve the economic actors in developing a more coherent and more environmentally friendly energy policy. A policy, which will help achieve sustainable economic development, inside and outside the Union.



SPEECH/97/113

 

 

 
Ημ. Έκδοσης:18/05/1997 Share Εκτύπωση
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