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EU member states are slow to open markets

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The European Commission has criticised the large majority of member states for delays in opening up their gas and power markets to competition.

European legislation sets 1 July 2004 as the date when the two markets were to be open for all business consumers. This should have enabled businesses in the EU to benefit from competition for their energy supply. Many EU states are, however, late in implementing this legislation.

The EU energy commissioner, Loyola de Palacio, said: “Member States agreed in 2003 on the legal framework for competitive and fair electricity and gas markets, including effective regulation, unbundling of networks and far reaching consumer protection.

“It is now up to them to live up to their responsibilities and fulfil the firm engagement they took to open the markets by this month.”

The directives, accepted last June, state that from 1 July 2004 all businesses must be able to choose their electricity and gas supplier freely, with household consumers to follow by July 2007 at the latest.

The directives state that network operators have to be separated from the parts of the gas and electricity activities where competition is possible and all member states have to appoint an independent regulator. The directives also foresee the possibility for the member states to impose public service obligations – such as security, regularity, quality and price of supplies – and to ensure the provision of universal service to small enterprises.

Many markets are still dominated by just a few suppliers, according to the Third Benchmarking Report on the Implementation of the Internal Electricity and Gas Market. Market opening has, however, led to a drop in electricity prices, which have fallen by 10 to 15% in real terms since 1995.

Picture © Xunta de Galicia – 2003

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