Power markets will be further opened by EU liberalisation package
“The newly-adopted market liberalisation package will help open European power markets and allow a higher penetration of renewables, particularly wind power. One drawback comes in the form of possible opt-outs to full ownership unbundling,” said Christian Kjaer, Chief Executive of the European Wind Energy Association (EWEA). The European Parliament adopted the final version of the third internal market package earlier today, 19 months after the Commission’s initial proposal in September 2007.
According to the final text, National Regulatory Authorities will have to facilitate the integration of renewables into the power grid, and TSOs will have to grant electricity from renewable sources priority dispatch, confirming the requirement contained in the 2009 Renewable Energy Directive. This will help adjust the balance of the power markets, currently heavily tilted towards conventional fuels.
The preferred approach of ‘full unbundling’, as proposed by the European Commission and supported by EWEA has been retained in the final document. ‘Full unbundling’ means large vertically-integrated energy firms which control both electricity production and distribution assets would be entirely broken up. However, two ‘opt-out’ clauses appear in the final text. These both allow European energy companies to retain their network assets, with either an Independent Systems Operator (ISO) overseeing network activities, or the day-to-day grid management being put in the hands of an Independent Transmission Operator (ITO).
“If a Member State chooses one of these alternatives to unbundling, it will be to the detriment of its 2020 binding renewables target and of the overall development of the internal energy market, as neither alternative will allow fully effective power market competition” Kjaer pointed out. “Moreover, the opt-outs would both put a huge bureaucratic burden on the Member State and grid operator in question.” EWEA therefore urges Member States to choose the preferred option of full ownership unbundling when implementing the Directive.