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European energy reform unveiled | |
(about 4 hours later) | |
Plans have been put forward in Brussels that would open European energy markets to greater competition. | |
The European Commission put forward proposals that would force energy giants to "unbundle" operations. | |
This means that businesses which generate power and supply gas would not be allowed to control the electricity grid or pipeline networks. | |
Firms would be forced to either sell transmission networks or lease them to new operators. | |
The Commission says that the move would encourage new entrants to the sector as well as boost investment in infrastructure. | |
The proposals would also shield markets from outsiders such as Russia's Gazprom, which supplies about 25% of Europe's gas. | |
If it wanted to enter the market, it too would have to separate its supply and network businesses, under the regulations. | |
'Competitive' | 'Competitive' |
A Commission report said the existing dominance in some countries of vertically integrated companies, meant that too many EU residents and firms "lack a real choice of supplier". | |
That dominance gave the energy titans "an inherent interest to limit new investment when this will benefit competition," it said. | That dominance gave the energy titans "an inherent interest to limit new investment when this will benefit competition," it said. |
Commission president Jose Manuel Barroso said that energy was a "driving force of our economy". | Commission president Jose Manuel Barroso said that energy was a "driving force of our economy". |
"We need a common European response to combat climate change, to achieve greater energy security and provide abundant energy at a fair price for citizens. | "We need a common European response to combat climate change, to achieve greater energy security and provide abundant energy at a fair price for citizens. |
"This is only possible if we have a competitive gas and electricity market," he said. | |
The proposals have to approved by member states and the European Parliament, and it could be years before they take effect. | |
Independent regulator | Independent regulator |
The Commission also called for an independent EU energy agency to oversee national regulators. | The Commission also called for an independent EU energy agency to oversee national regulators. |
Germany's E.ON and Electricite de France are among those that are tipped to be hardest hit. | Germany's E.ON and Electricite de France are among those that are tipped to be hardest hit. |
Sam Laidlaw, the chief executive of British Gas-owner Centrica, said that the proposals were "an important step in providing more competitive energy markets for the benefit of Europe's energy customers". | Sam Laidlaw, the chief executive of British Gas-owner Centrica, said that the proposals were "an important step in providing more competitive energy markets for the benefit of Europe's energy customers". |
"Ownership unbundling is the best way of opening up the closed shop that is the European energy market, of attracting investment and delivering better security of supply," he said. | "Ownership unbundling is the best way of opening up the closed shop that is the European energy market, of attracting investment and delivering better security of supply," he said. |
"It should also allow better gas flows across Europe to supply our British Gas customers. For unbundling to work, though, a vital ingredient is watertight regulation, which the Commission is rightly proposing to implement." | "It should also allow better gas flows across Europe to supply our British Gas customers. For unbundling to work, though, a vital ingredient is watertight regulation, which the Commission is rightly proposing to implement." |