Full 'unbundling' only option, says MEP

17th June 2008

TOTAL separation of Europe's electricity supply and transmission systems is the only way to ensure a fair, secure and stable market, the European Parliament's electricity rapporteur today said.

Ahead of a key vote tomorrow on reforming Europe's electricity market, Euro-MP Eluned Morgan, the Parliament's rapporteur, urged MEPs to back her report's proposals for electricity networks to be separated from generation and the EU energy market opened to more competition.

The so-called ‘unbundling' will remove the conflict of interest of companies that own both production and distribution of electricity. It will also ensure access to the grid for renewables and promote a fully functioning internal market, bringing choice and security benefits for consumers

Speaking in Strasbourg today as the European Parliament debated her report, ELUNED MORGAN said:

"The fact is that companies who own both the energy grids and generation have a vested interest in keeping other companies out of the market. There is a strong suspicion that some companies in some Member States have not been playing fair, giving priority access to their own companies and putting obstacles in place to stifle competition.

"It is only through a full separation of generation and grids that the European Union market in electricity can truly develop. Unbundling is the only option if we want to ensure a level playing field which will deliver security and choice benefits for consumers.

"Moreover, the European Commission has calculated that up to one trillion Euros needs to be invested in Europe's energy markets. This will be impossible unless there is a stable regulatory framework. Full ownership unbundling will be essential to ensuring the stability required for the investment that will keep the lights on in Europe. "

Notes

• Among the other key proposals contained in the report are:
- Tackling energy poverty - for the first time placing the issue on the EU agenda, including measures to ensure each Member State has an energy poverty action plan
- Protecting consumers - simplification of procedures for switching supplier; better transparency and access to information
- Boosting energy efficiency - promoting SmartMeters; increasing block tariffs; encouraging energy efficiency
- Better regulation - increased powers for National Regulatory Authorities; increased transparency; ensuring effective market opening through cooperation with competition authorities
- Support for SMEs - including extending the definition of universal service obligations
- Proposals for a Charter of Consumers Rights will also be put to the vote.

• Eluned Morgan is MEP for Wales, a member of the European Parliament's Industry, Research and Energy Committee and rapporteur on the European Commission's electricity Directive.

• Eluned Morgan's report on the proposal for a directive of the European Parliament and of the Council amending Directive 2003/54/EC concerning common rules for the internal market in electricity, will be debated by the European Parliament on Tuesday 17th June, and will be voted on Wednesday 18th June.

• For more information please contact Lisa Stevens at the Labour European Office on 029 2022 7654 or 079 7367 8175