Competition policy in the EU energy sector

Transcription

1 Competition policy in the EU energy sector NEUF June 2008 Kristóf Kovács DG Competition, European Commission

2 EU energy markets the issues Energy Sector Inquiry identified obstacles holding back effective competition and the benefits of liberalization EU energy markets characterised by Market concentration Vertical foreclosure Lack of market integration (little interconnection capacity) Lack of transparency Distrust in price formation Little competition in downstream markets Objectives An integrated market Networks developed and operated to serve the interests of European consumers Strong and efficient European energy companies Achieving simultaneously competition, security of supply, and sustainability How to remedy the situation? 2

3 Instruments to remedy situation Competition law Implementation of remedies: Structural Behavior Competitive energy markets 3rd liberalisation package: Effective separation Enhanced powers of Regulators Efficient cooperation between TSOs etc. Complete and structured legal framework 3

4 EC Competition law enforcement in the energy markets Commission applies several instruments of competition law: Antitrust 3 1 Merger Control In addition: TPA exemptions; continuous market monitoring and examination of complaints. Competition law toolbox 2 State Aid 4

5 1 Merger enforcement - examples Cases without issues: E.ON-Endesa (2006), Iberdrola-Scottisch-Power (2007) Elimination of a competitor/competition at wholesale level: VEBA-VIAG (2000), EdF-EnBW (2001), ENI/EDP/GDP (2004), GDF-Suez (2006) Gas to power - vertical foreclosure: Neste-IVO (1998), ENI/EDP/GDP (2004), E.ON-MOL (2005), GDF-Suez (2006), Dong-Elsam-EnergiE2 (2006) Elimination of a competitor/competition at retail level: Verbund-EnergieAllianz (2003), ENI/EDP/GDP (2004), GDF-Suez (2006) Balancing issues: Verbund-EnergieAllianz (2003) Market for refined oil products: OMV-MOL (case still under investigation in Phase II) 5

6 1 Merger case law - remedies Divestitures: VEBA-VIAG (VEAG-Laubag, Bewag, VEW, HEW, Rhenag), EdF-EnBW (CNR, WATT), Verbund-EnergieAllianz (APC), GDF-Suez (Distrigaz, SPE) Energy Releases: EdF VPP (6000MW), Verbund-APT (450GWh), E.ON-MOL (gas 16bcm) Changes in rules: VEBA-VIAG (transport, balancing), Verbund-EnergieAllianz (balancing) Rules on interconnector: VEBA-VIAG (NO-DK interconnector) Unsatisfactory remedies=>prohibition: ENI-EDP-GDP 6

7 2 State aid cases Regulated tariffs: protecting consumers or protecting incumbents? Block competition by pricing out newcomers. Distort market signals and lead to underinvestment. Bad for energy efficiency and security of supply. May be justified to protect vulnerable customers. State aid investigations against subsidised electricity tariffs in Italy, Spain and France. Stranded costs: power purchase agreements in Poland and Hungary Improving competition through state aid control. The Commission ascertains that government interventions do not interfere with the smooth functioning of the internal market 7

8 3 Antitrust: current areas /cases Market sharing: EON / Gaz de France (gas) Access to network capacity (gas): ENI, RWE Use of the network: E.ON (elec.) RWE (gas) Withholding of capacity (electricity): E.ON Foreclosure of downstream supply markets: Gaz de France Access to baseload (electricity): Greek lignite-ppc (decision) Long-term contracts: Distrigaz (decision), EdF DG Competition has been developing competition cases that address competition problems along the gas and electricity supply chains 8

9 3 E.ON electricity case Case concerns two markets: Wholesale: withholding + deterrence of investment Balancing: favouring affiliates Remedies offered Divestiture of 4800MW of generation capacity Divestiture of the transmission network Addresses vertical integration concerns Commission Intends to market test E.ON's proposals, With a view to adopting a decision under Article 9 of Regulation 1/

10 3 Withholding of capacity By not offering some profitable generation generators can force recourse to more expensive plants on the merit curve and thereby manipulate market outcomes to the prejudice of consumers 10

11 3 Withholding of capacity /MWh Demand Price Offer Hydro Nuclear Lignite Coal Gas MW 11

12 3 Withholding of capacity /MWh Demand Price Offer Hydro Nuclear Lignite Coal Gas MW 12

13 3 Withholding of capacity /MWh Price Demand Offer Hydro Nuclear Lignite Coal Gas MW 13

14 3 RWE gas case Legal basis: Art. 82 EC suspected abuse of a dominant position Case concerns markets: Access to and use of the network RWE may have used the control over its transmission network in W DE to foreclose supply markets Preventing new entrants from gaining access to infrastructure can hinder the development of competition in energy markets Remedies offered Divestiture of the transmission network Commission Intends to market test RWE's proposals, With a view to adopting a decision under Article 9 of Regulation 1/

15 Way forward Implementation of complete and structured legal framework (Effective unbundling of infrastructure and supply, strengthening transparency obligations, harmonization of market design, strengthened regulatory cooperation) Competition law enforcement (Antitrust investigations, merger control, state aid control) Improvements of the legal framework and enforcement of competition law comprehensively and effectively addresses key issues relating to market structure and regulatory/competitive environment 15

16 Conclusions The Commission is committed to promoting competitive markets Difficult decisions will have to be taken in the nearest future 3rd liberalization package on the internal energy market rules together with the competition law enforcement makes a difference 16