[EUROPE] MEPs to vote to open up European Union energy market

MEPs are expected today to endorse controversial plans to force huge mainland European energy groups to sell off their power transmission networks and open up the European Union market to greater competition.

The European parliament's industry, research and energy (ITRE) committee is also expected to stymie alternative proposals to hand over control of the grids to independent operators but allow the groups to retain ownership.

Today's vote will be seen as crucial by British and Spanish groups such as Centrica, owner of British Gas, and Iberdrola, owner of ScottishPower, which have seen their ambitions to break into other markets thwarted by the dominance of "national champions".

Labour MEP Eluned Morgan said that the vote would give a fillip to the proponents of full "ownership unbundling" (separating transmission from generation/supply) and added: "We should be able to deliver a knockout blow to the other, weaker options" - a so-called third way would have given more power to regulators to control grid investment.

The European commission, which favours unbundling as the best way to promote competition and lower energy prices, will use today's vote to toughen its plans in the face of opposition from France, Germany and six other countries that form a blocking minority among the European Union's 27 members.

Senior officials have suggested that power grids should at least be controlled by independent operators which would set annual investment plans and raise capital, with the plans overseen by regulators.

But Morgan said this could cement conflicts of interest if generators remained the owners of grids: "We would like to see national regulators given far more powers to fine companies which break the rules, adopt a more stringent approach to appointments and monitor, manage and police the networks. Consumers should also be given much greater influence."

Today's vote will coincide with a call from Chris Davies, a Liberal Democrat MEP, for new coal-fired power plants to be fitted with carbon-capture and storage (CCS) technology by 2030. Fifty new coal-fired plants are planned in Europe over the next five years.

Davies, in charge of negotiations with the commission on CCS, said his strict time frame would help compensate for European Union countries' failure to meet their targets for 20%renewables within Europe's energy mix by 2020.

"There's very little likelihood that the UK, above all, will meet its [15%] target," he said. "As matters stand we will probably be halfway to the target at best ... At least if we accelerate CCS we will have made up the ground."

He said CCS could remove 80% of coal emissions. But he clashed on the issue with the environmental pressure group Greenpeace, which said CCS was a "false promise" and "simply can't deliver in time" because there are no large-scale plants in the world capturing CO2. Whereas renewables that are technically accessible could provide six times more energy than the world now consumes. Davies said such comments were "divisive and dangerous".

Source: The Guardian| by David Gow

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