Proposal to be introduced to speed up European deregulation

Loyola de Palacio, vice-president of the European Commission, Tuesday said she will propose accelerating the timetable under which consumers can choose an electricity supplier. Speaking in Brussels, Palacio said, with two-thirds of the market open to competition initial expectations have been surpassed, and it is time to give all consumers the right to choose a supplier. 'I will, therefore, propose full opening of the market to all consumers by 2005,' Palacio said.

March 7, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Mar. 7�Loyola de Palacio, vice-president of the European Commission, Tuesday said she will propose accelerating the timetable under which consumers can choose an electricity supplier.

Speaking in Brussels, Palacio said, with two-thirds of the market open to competition initial expectations have been surpassed, and it is time to give all consumers the right to choose a supplier.

"I will, therefore, propose full opening of the market to all consumers by 2005," Palacio said. At the same time, she warned, the emerging single market for electricity in Europe requires new action by governments and authorities to avoid market imbalances such as the concentration of market power.

In addition, Palacio explained, specific action is needed to promote environmentally friendly electricity, in particular renewable energy. He noted consumer choice is already driving changes in favor of renewables energy, but there are obstacle to overcome.

One of the most important problems of developing renewables is financial, Palacio noted, and some renewable technologies need significant initial investment. In a paper on green energy, she said, the Commission raised the possibility of financing renewables by subjecting the most profitable energy sources�nuclear, oil, and gas to a tax.

This could be done, for example, via a parafiscal tax to finance a regional or national fund for the necessary start-up investment, Palacio said.

Some utilities already offer a "green" energy supply package. Consumers who are willing to pay a premium for renewable or green electricity will increasingly be able to do so, Palacio said. Member states can now impose public service obligations for environmental reasons, and can dictate priority dispatch for electricity from renewables.

Palacio noted many member nations have adopted ambitious support schemes for renewable electricity. She noted the Commission complemented these measures with a proposal for a directive on electricity from renewable energy sources. A directive and the formal common position of council is expected Mar. 15.

Palacio predicted the directive, once adopted, will create the "framework for a dynamic European market for electricity from renewable energy sources."

She said national targets for the future consumption of electricity from renewable energy sources will boost demand for production of "green electricity." Doubling the share of renewables to 12% from 6% and raising their part in electricity consumption to 22% from 14 % is an important objective in any long-term European energy security strategy, Palacio said.