IP/08/1484

Brussels, 10 October 2008

Council deal on energy package: a crucial step towards completing the internal energy market

President Barroso and Energy Commissioner Andris Piebalgs have today welcomed the agreement reached by EU Energy Ministers on the Commission`s 2007 legislative package for the EU electricity and gas market. This agreement will enable many of the benefits of an open and competitive energy market including fair prices for citizens and industry; business opportunities for new or smaller companies (for instance those investing in renewable energy); or clear investment conditions for new power plants and transmission networks which can result in increased security supply and less risk of blackouts.

President Barroso said, "I am delighted by this extremely good news for consumers and businesses in Europe. It is a crucial step towards the completion of the single market. It provides a new basis to the discussion on energy security at next week`s European Council. But most of all it brings momentum to our efforts to reach agreement on the energy and climate change package in December".

Commissioner Piebalgs stated: "I am pleased that Member States are supporting the Commission`s drive to create a real internal energy market. The internal market is essential to deliver all three of Europe`s energy objectives: a competitive European economy, security of energy supply and sustainability."

A competitive market will cut costs for citizens and companies and stimulate energy efficiency and investment. It is vital for the emissions trading mechanism to work properly. An Internal Energy Market which functions effectively and is competitive can provide major advantages in terms of security of supply. Member States recognise that more needs to be done to create a real European gas and electricity grid and to have a truly competitive market.

The main objective of the legislative package as proposed by the Commission in September 2007 and agreed by Energy Minsters today is to have a complete internal energy market with open competition and effective regulation. A real European grid should work as one single grid. A number of measures are needed to achieve these objectives, mostly of a rather technical nature:

New rules to avoid discrimination are needed, for instance through a clearer separation of energy production from energy distribution. The Council has retained three unbundling options which it is considered readdress the problem.

It is also important to have European-wide regulation functioning, not least to facilitate cross-border electricity trade. Member States have agreed to the establishment of an Agency for the Cooperation of European Regulators which takes account of the European interest.

These measures are essential for ensuring that sufficient new power generation capacity is built throughout Europe. Energy Ministers and the Commission are convinced that high investment is needed to ensure capacity and transmission.

After today`s agreement in the Energy Council, the Council, the European Parliament and the Commission will enter into negotiation to find a compromise. The whole package is expected to be adopted in the first half of 2009.

The Press Release is available here.