European Utilities: July 1st 2007 will lead to tough EU sanctions

Table of Contents

• DATAMONITOR VIEW
  • PREDICTION
  • EU Directives require the European gas and electricity to open to full retail competition by July 1st, 2007.
  • SUMMARY
  • Many countries will not properly adopt or enforce the national laws necessary to implement the EU Directives. Alternatively, even where national laws are adopted, the unbundling/liberalization approach adopted by the EU Directives will in some places fail to produce a significant degree of competitive intensity. The EU Competition Directorate General will step in to fill the legal void, pushing liberalization even further than was contemplated by the Directives themselves.
  • METHODOLOGY
• ANALYSIS
  • The EU Electricity Directive has five key components that should be reflected in national laws and regulations
  • The EU Gas Directive has three key components that should be reflected in national laws and regulations
  • Failed market opening in some jurisdictions will push the onus on compliance with EU Directives from the national to the corporate level
  • Many countries will not properly adopt or enforce the national laws necessary to implement the EU Directives
  • Many countries still have not properly implemented some July 1st, 2004 Directive requirements
  • Options to enforce EU Directives are weak
  • Even if formal national legal frameworks are adopted, many countries will fail to properly implement and police them
  • The unbundling/liberalization approach adopted by the EU Directives will in some places fail to produce competitive outcomes, and the EU Competition Directorate General will step in to fill the legal void
  • In some countries the EU Directives will not achieve the desired outcomes of enhanced competition and benefits to energy consumers
  • The Competition Directorate General may push energy market liberalization further within the framework of competition law than the EU Commission contemplated through its Directives
  • All indicators point to the Competition DG adopting a tough, activist stance with respect to energy market liberalisation
  • Compliance with the EU Directives will be pushed from the governmental to the corporate level
• APPENDIX
  • Further reading
  • Ask the analyst
  • List of Figures
    • Figure 1: EU Electricity Directive: five key components
    • Figure 2: EU Gas Directive: three key components