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Energy giants set to win delay on ‘unbundling’ - interview

A compromise deal is taking shape in Brussels that could see France and Germany win a six-year delay in opening their energy markets to full competition, according to Alejo Vidal-Quadras, one of the leading MEPs on the dossier.

The European Commission, Parliament and EU member states are heading for a middle way on energy liberalization, said Vidal-Quadras (Spain, EPP-ED), who has led similar negotiations in the past. A first step is expected today (6 May), when MEPs in the Parliament’s industry committee vote on a report by Eluned Morgan (UK, PSE) on the Commission’s proposal for a directive to complete the internal market in electricity. And although the committee is widely expected to back the Commission, Vidal-Quadras says a “European logic” will prevail to find a compromise in the end. “Now, everyone is taking strong positions and trying to put pressure on the other side, but at the end there is a European logic that normally would work.” In a sign that it is ready for compromise, the European Commission appeared to soften its stance. Ahead of the vote, it specified the conditions under which it could accept an alternative proposal - called the ‘Third Way’ - backed by France and Germany.

According to Vidal-Quadras, a period of time where both the Third Way and the unbundling option could co-exist is inevitable. “I couldn’t say so with absolute certainty. But if there is in the end an agreement, it would be on the basis of this period of coexistence of both,” he told EurActiv in an interview. However, he added it was “well understood that the third way would need to be very much improved” in order for the Commission to approve the compromise. “The Third Way needs to be strengthened in order to be acceptable,” EU Energy Commissioner Andris Piebalgs told the French Senate at a hearing on 17 April.

Vidal-Quadras said the two-track approach was inevitable because national circumstances were too different. “There are member states where ownership unbundling is fully implemented, there are others where it is not, there are member states where the energy sector has been fully privatized, others not.” But he also made it clear that the compromise deal would only serve to buy time for integrated energy firms such as France’s EdF and Germany’s E.ON and RWE. “My impression, and that of many colleagues of mine, is that those who resist ownership unbundling are becoming more aware that they are defending a lost cause.”

Earlier in April, the Parliament’s Internal Market and Consumer Protection Committee (IMCO) backed the two-track approach. In a non-binding opinion on 8 April, it gave its backing to Germany and France, saying that EU countries should be offered other options as well as simply ownership unbundling. “Our proposal, supported by the committee, is that six years after implementation, an independent assessment is undertaken to evaluate the next steps towards liberalization,” said Nickolay Mladenov, the MEP who drafted the report. And according to Vidal-Quadras, there is more drama to be expected after today’s vote in the committee. “As always in European politics, you will not know the result of the game until the very last minute.” (Euraktiv)