1 Competition in the Energy Sector – The EU Perspective Prof. Dr. Hans Vedder – University of Groningen 1
Overview Competition in the EU Energy Sector Overview of main trends 2 Overview Competition in the EU Energy Sector Overview of main trends Application to EU-Russia Energy Dominance Foreclosure Market Partitioning
Competition in EU Energy 3 Competition in EU Energy EU competition law consists of (inter alia) Prohibition of restrictive agreements Prohibition of abuse of dominance Both applied in the energy sector Market sharing / partitioning arrangements Vertically integrated companies using networks to foreclose access increase prices or discriminate
Competition in EU Energy 4 Competition in EU Energy Purpose is to come to an internal energy market Free movement Undistorted conditions of competition But: Low degree of interpenetration High levels of concentration Commission information asymmetry Sector inquiry and
EU Russia Energy Gazprom is the EU’s largest third country supplier 5 EU Russia Energy Gazprom is the EU’s largest third country supplier EU is Gazprom’s largest export destination EU is becoming increasingly import dependent Result: an increasingly close and difficult relationship Difficulty: EU competition and Gazprom
EU competition and the upstream gas sector 6 EU competition and the upstream gas sector Several earlier cases involving market partitioning (destination clauses etc.) Difficulty to find right balance between Market access and opening lower prices, high contestability Need to recoup upstream investments high prices, low contestability
EU competition law and Gazprom 7 EU competition law and Gazprom Sept. 2011 - Dawn Raids Sept. 2012 – Commission confirms opening of proceedings ex. Art. 102 TFEU Market partitioning Restricting diversification of supply Unfair prices Current investigation, but politically sensitive
Thank you for your attention h.h.b.vedder@rug.nl 8 Thank you for your attention h.h.b.vedder@rug.nl