European energy: policy consensus a long way off

                                                                                         

Ireland's push to increase competition, by forcing its national monopolies to sell assets, is contrasted by Bulgaria's announcement that the major gas and energy suppliers will merge. These different approaches suggest that conformity to a central European Union energy policy will be hard to find.
Ireland's national gas supplier, Bord Gais, has reportedly joined forces with established electricity merchant, International Power, to purchase three power stations from the national electricity supplier, ESB. The sale has been promoted by the Irish government as a way to reduce the dominance ESB has in the market. Contrary to this, the Bulgarian government has agreed to merge the dominant national gas and power suppliers into one, in an effort to stave off possible acquisitions from one of the large European companies.
The conflicting actions of the Irish and Bulgarian governments highlight the deep chasm of opinion across the EU. While the Bulgarian government is introducing protectionist policies to help keep control of their energy market, the Irish government is comfortable letting new companies enter their market, bringing competition and choice to energy consumers.
The Irish approach is no doubt influenced by the market actions that have shaped the UK energy markets over the past decade, delivering benefits and choice to consumers, at the expense of national control. Bulgaria's actions illustrate a government that does not want to lose control of its vital energy resources, even if it results in less choice for the consumer. This is likely due to the lack of trust the government has in 'the market' protecting jobs and consumers, as well as ensuring security of supply.
However, Bulgaria is far from alone in trying to protect its national companies. The French and German governments are fighting hard against the EU's energy liberalization agenda, in an attempt to protect their respective 'national champions'. Vehemently unhappy about the EU's 'third package', which seeks to unbundle the large European utilities, countries including France and Germany proposed an alternative which retained ownership, but separated operation.
The decisions made by the Irish and Bulgarian governments show how difficult it will be for the EU to get consensus regarding competition and ownership in European energy policy, and with strong views on both sides it is hard to see where an agreement may be reached.

About the author:
Velimir Lackovic runs internet portal "Energetika" ( http://www.energetika.co.yu )
dedicated to renewable energy sources,oil gas and energy efficiency. Velimir has
completed gratuadte studies in power systems engineering and
has industry experiance of over 20 years in this field.

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