EU gearing up for battle over splitting up energy groups

(BRUSSELS) – The European Commission, eager to fire up Europe’s energy markets with more competition, is drafting plans to break up big integrated gas and power majors despite stiff opposition from many countries.

The European Union’s executive arm is due to present plans on September 19 that it hopes could bring relief to European consumers, which it has long said pay too much for their energy due to a lack of competition.
The Commission believes that the situation could be rectified by forcing them to loosen their grip on both gas and electricity production and the infrastructure needed to get it to customers.

Therefore, it is finalising proposals for so-called ownership unbundling, which could force big integrated energy majors to split into separate companies either producing energy or delivering it.

“Choosing a gas or electricity provider is a fundamental right,” said Commission spokesman for energy issues, Ferran Tarradellas Espuny. “For that, asset separation is equally fundamental.”

“We still believe that this asset separation is the best solution.”

German business daily Handelsblatt reported that a draft version of the Commission’s proposals did indeed call for big energy companies being split into separate companies either generating electricity or distributing it.

According to the newspaper, the Commission is considering two options.

Energy producers that also own distribution networks would either have to sell it to an independent investor or if they remained the owner they would have to entrust the management and investment decisions to an independent operator in exchange for “appropriate” fees.

EUbusiness