Cause and Effect in European Politics and Law

EP endorsed the Third Energy Package

Adelina Marini, April 22, 2009

The European Parliament approved further liberalisation of the gas and electricity market in the EU. This happened after MEPs supported the Third Energy Package of the European Commission which regulates the separation of supply and production from transmission network operations.

According to the decision of the European Parliament, Member state can choose between three possibilities: full ownership unbundling, the independent system operators and independent transmission operators. In the first case companies will have to sell their transmission grids thus establishing separate transmission system operators which handle all network operations. To liberalise energy market, Member states can oblige companies to hand over the operation of their transmission network to a designated, separate and independent body. With the third option actually the status quo is kept under specific rules.

One of the aspects of the Third Energy Package of the European Commission was the restriction of access of non-EU companies to the energy market of the Union. Russia was first to see this as directed against its interests and this lead to a lot of disputes and division within the Union. MEPs endorsed the provisions which prevent control of transmission systems or their owners by companies from non-EU countries until they fulfill certain conditions, i.e. a national regulator will have the right to refuse a certification of a transmission system operator, controlled by "a person or persons from a third country". The condition is the company to comply with the unbundling requirements. Member states will have three and a half years to implement this part of the Package. By the way, Bulgaria has already encountered this case during the visit of president Parvanov in Moscow in the beginning of the year when it became clear that Russia wanted to get some rights over the Bulgarian transmission system. This was part of Moscow's conditions for the conclusion of the "Southern Stream" deal.