Liberalization begins in Europe

A directive opening up the European Union`s electricity markets to competition took effect last month, with all but one EU nation meeting the February 19 deadline. EU Energy Commissioner Christos Papoutsis hailed the development as a success but said that more work was needed to make the market work.

Theoretically 26.5 per cent of the 15-nation bloc`s power market is now open to competition, with two-thirds of consumers able to choose their supplier. Belgium and Ireland have been granted an extra year to open up their markets, and Greece an extra two years.

France missed the deadline for opening up its market. Italy`s government – expected to miss the deadline – managed on February 19 to approve market reform legislation. Papoutsis said he expected France to introduce competition by the summer, but would not hesitate to take court action if Paris dragged its feet.

The Commissioner recognised that there is still a need to ensure fair allocation of licences, transmission tariffs are clear and open, and cross-border trade barriers are removed.

Belgium may also be able to open 35 per cent of its market to competition by March in spite of the year-long extension it has been granted. Electrabel has said that it has put pressure on the government to move ahead with liberalization in order to allow its main generator and distributor to compete in the European market.