EU in Energy Liberalization Push

The European Commission has threatened 16 member states with legal action for not passing laws that will open energy markets to full competition by July

The European Commission is gearing up for a last heavy push to open the bloc's energy market with the deadline for full liberalisation of the sector fast approaching.

On Tuesday (12 December), the commission threatened 16 of the 25 member states with legal action for not putting EU energy rules into place.

The move is part of a general shift in focus towards the sector and came on the same day as the EU raided four major energy companies in Germany - E.ON, RWE, ENBW and Vattenfall - for alleged anti-competitive practices.

Brussels has been hammering away at the energy market for several years with several countries, including the largest member states, holding out against the competition drive.

Both the raids and the legal threats indicate there are still major problems with liberalising the sector, which under rules agreed in 2003 should see private consumers across the bloc able to freely choose their energy supplier by 1 July next year.

"The commission regrets that insufficient progress has been made by member states in implementing in letter and in spirit EU 2003 directives setting up an internal market in gas and electricity," it said in a statement.

"Incumbent electricity and gas companies largely maintain their dominant positions on 'their' national markets," it added.

Brussels also acted earlier this year in May conducting surprise searches of energy companies in Germany, France, Belgium, Austria and Italy looking for proof that companies squeezed out competitors by restricting access to pipelines.

MORE QUESTIONS THAN ANSWERSThe commission's hard energy drive has also seen it clash with national governments, including Germany, France and Spain.

But the real test of the commission's resolve will come early next year when it becomes clear to what extent Brussels is ready to tackle energy monopolies which it feels are hindering competition by controlling both production and distribution.

This will be revealed on 10 January in a major energy package – however a report in last week's Financial Times indicated that France and Germany have already pressurised commission chief Jose Manuel Barroso into backing down from trying to dismantle major national utilities.

Speaking earlier this month, Germany's ambassador to the EU Wilhelm Schönfelder said the commission package is likely to throw up "more questions than answers."

Among the aspects that will be relatively clear are likely to be energy efficiency and bio-energy; while the trickier features will include the national energy mix, competition in energy and energy champions, the ambassador said.

This heady mix will have to be sorted out in just a few short weeks with EU leaders set to sign off an energy action plan for the bloc in March.