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BB200607, News in Brief

The High Level Group on Competitiveness, Energy and Environment has issued its first report: new legislation in the energy field might be on its way

29.01.2007

After 4 months of work, the new High Level Group (HLG) on Competitiveness, Energy and Environment has adopted its first report during its second meeting on 2 June. The report includes a number of concrete recommendations to address urgent issues such as: the improvement and implementation of EU regulatory energy framework, energy efficiency, the functioning and reviewing of the EU Emissions Trading Scheme (ETS). In addition, the HLG has also set up two additional ad hoc groups to analyse barriers and drivers for investment in innovative energy technologies (power generation and energy efficiency) and long term energy future for the EU.

New legislative proposals in the energy field could be on the agenda of the European Commission.

The high level group, set up in October 2005 (see Brussels briefing 05/11) to advise the EU on competitiveness, energy and environment, issued its first report just 4 months after its first meeting. The group, chaired by the European Commission 's Vice President Günter Verheugen, is made up of senior representatives from European institutions (with the notable exception of the European Parliament), European industry (with the notable exception of renewables industries) and civil society. In its 11 page report, t he group said there is significant untapped potential for improving energy efficiency, both in production and product design. In addition, it urges a stricter application of existing legislation and the introduction of tougher legislation with energy issues deemed crucial to the international competitiveness of European energy industries. The recommendations for new legislative proposals are a surprise as the Barroso Commission has been careful since its entry into office not to bring forward new legislation.

On Energy market

Like the recent conclusions of the sector enquiry (see Brussels Briefing 06/2), the High Level Group calls for "urgent action" to restore the proper functioning of the internal market for energy and draws attention to excessive concentration among operators and inadequate unbundling of network activities. It is important not only to fully apply current legislation but also to "improve it" where necessary. The call for new legislation differs from previous statements of the European Commission, which estimated that the existing legislation and its proper implementation was sufficient to reach internal energy market objectives.

Areas where regulatory action is recommended include: harmonising regulators ' powers and even the coordination of their actions at European level; harmonisation of standards for exchanges between networks, notably to facilitate the creation of regional markets and reform of competition regulations. It asks the European Commission to determine within the year how long term partnerships between clients and suppliers might be encouraged whilst ensuring compliance with competition rules.

EWEA warmly welcomes the call of the High Level Group to implement effective measures and to introduce new measures in order to open up the electricity market. Key requirements in creating effective competition in the power market are the removal of monopolistic positions and potentials for abusing these positions; full ownership unbundling; and more cross-border transmission lines, better transparency rules on network access and pricing conditions. Effective competition in the conventional power market is a myth. Now comes the time for effective action.

Ad hoc Group 6 on «drivers for investment in innovative technologies, in power generation and energy efficiency»

During the second meeting on 2 June, the High-Level Group has set up two additional ad hoc groups to the 4 existing ones. Those sub-groups are charged respectively with examining barriers and incentives for investment in innovative energy options, and a vision for the EU 's energy future. The HLG will address issues where competitiveness, energy and environmental policies interrelate. It will seek input from experts and stakeholders during the summer. Experts will be invited by the Commission to attend a meeting in July or September 2006.

The 6 th Ad Hoc Group on “drivers for investment in innovative technologies, in power generation and energy efficiency” provides relevant information to the Sherpa sub-group of the HLG on the most effective policy measures and tools for making the relevant industry investments in the energy field more attractive.

At its next meeting, scheduled for 30 October 2006, the HLG is expected to report on the experts’ inputs. The scope of work will include the following issues:

1. Analysis of the barriers and drivers for investment in innovative technologies, in power generation and energy efficiency by industry in the energy field. The ad hoc group should focus its work on investment drivers and on the identification of the most appropriate and cost-effective actions.

2. Explore the extent to which the EU can promote actions to foster investment in innovative technologies, power generation and energy efficiency in Europe, in a global context. The ad hoc group should identify concrete measures and possible recommendations, including recommendations designed to ensure a stable and investment-friendly regulatory framework, encourage investment and uptake of environmentally sound technologies that would be consistent with competition and internal market rules.

The objective of these working groups will be to draw up recommendations on how policy options can be developed to enable a sustainable, low carbon, and competitive energy system which also contributes to strengthening the competitiveness of the European economy, and which promotes energy security of supply post-2010.

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