1. September 10, 2003SVSE 2003 - Praha1 EU Single market for energy Expectations of the European industrial consumers Peter CLAES President Ifiec Europe

2. September 10, 2003SVSE 2003 - Praha2 What is IFIEC Europe ? European federation of national federations of industrial energy consumers Issues : Market liberalisation (electricity – natural gas) Environmental aspects of energy policy European Climate Change Policy Renewables / nuclear energy / CHP / … Energy taxation …

3. September 10, 2003SVSE 2003 - Praha3 IFIEC Members EU-members Future EU- members Members D – F – GB B - NL – IRL I – GR – SF A – P H Non-members S – DK – LUX E (?) CZ – EST – LV LT – PL – SLO SK – M – CY

4. September 10, 2003SVSE 2003 - Praha4 1. Does the single market work ? Performance indicators:  How many users changed suppliers?  Did prices fall or (at least) converge ?

5. September 10, 2003SVSE 2003 - Praha5 How many users changed suppliers ? (1998-2001, Source: DG Tren, Eurostat) ElectricityIndustrialElectricityDomesticGasIndustrialGasDomestic Austria20-30%5-10%<2% Not eligible Belgium2-5% ??? France10-20% 20-30% Germany20-30%5-10%<2%<2% Italy>50% 10-20%2-5% Netherlands20-30% 30-50% Spain10-20% 20-30% UK>50%30-50%>50%>50%

6. September 10, 2003SVSE 2003 - Praha6 Did prices fall or (at least) converge ?

7. September 10, 2003SVSE 2003 - Praha7 Did prices fall or (at least) converge ?

8. September 10, 2003SVSE 2003 - Praha8 Did prices fall or (at least) converge ?

9. September 10, 2003SVSE 2003 - Praha9 Did prices fall or (at least) converge ?

10. September 10, 2003SVSE 2003 - Praha10 2. What went wrong ? 2.1. Does unbundling work ? Accounting unbundling (“Japanese Walls”) Management unbundling Legal unbundling Ownership unbundling (“Chinese Walls”)

11. September 10, 2003SVSE 2003 - Praha11 2. What went wrong ? 2.1. Does unbundling work ? 2.2. The impact of subsidiarity

12. September 10, 2003SVSE 2003 - Praha12 The impact of subsidiarity Source : Second benchmarking report DG Tren

13. September 10, 2003SVSE 2003 - Praha13 Source : Second benchmarking report DG Tren

14. September 10, 2003SVSE 2003 - Praha14 2. What went wrong ? 2.1. Does unbundling work ? 2.2. The impact of subsidiarity 2.3. Cross-border Transmission

15. September 10, 2003SVSE 2003 - Praha15 Cross-border Transmission 2.3.1. Suboptimal use of existing capacity e.g. Belgian-French border (electricity) available capacity : app. 4.000 MW available for market : 350-500 MW ULF : peaks of > 2.000 MW

16. September 10, 2003SVSE 2003 - Praha16 Cross-border Transmission 2.3.2. Lack of cross-border transmission capacity

17. September 10, 2003SVSE 2003 - Praha17 Cross-border Capacity Electricity In % of installed production capacity (Source: DG Tren) Potential competition from imports Market share of Top 3 producers Austria21%45% Belgium25%96% France12%92% Germany11%64% Italy14%69% Netherlands19%59% Spain4%83% UK3%36%

18. September 10, 2003SVSE 2003 - Praha18 Cross-border Transmission 2.3.3. No efficient congestion management system no agreement within ETSO no efficient exchange of information between TSOs no single European CM-system re-dispatching auctioning rationing market splitting

19. September 10, 2003SVSE 2003 - Praha19 2. What went wrong ? 2.1. Does unbundling work ? 2.2. The impact of subsidiarity 2.3. Cross-border Transmission 2.4. Complexity of energy policy

20. September 10, 2003SVSE 2003 - Praha20 Complexity of energy policy European Climate Change Programme renewables CHP CO 2 -emissions nuclear energy ? financing of other policies (public services, local entities, …) security of supply + NIMBY-syndrome !

21. September 10, 2003SVSE 2003 - Praha21 3. Recommendations of Ifiec full ownership unbundling (Chinese walls) full market opening for all users publication of all relevant information by TSOs and regulators

22. September 10, 2003SVSE 2003 - Praha22 3. Recommendations of Ifiec Electricity cost-based, fair CBT financing mechanism (non-distance related, fair share to be paid by producer) non-discriminatory, transparent and efficient congestion management system (no auctioning)

23. September 10, 2003SVSE 2003 - Praha23 3. Recommendations of Ifiec Gas (gas-to-gas competition) cost-reflective and simple tariff structure non-discriminatory, cost-reflective access to gas infrastructures (incl. Storage, off-shore facilities) clear, non-discriminatory, transparent balancing rules (preferably daily balancing) capacity rights subject to “use-it-or-loose-it”