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HOW CAN WE ENSURE A FUNCTIONING ENERGY MARKET IN EUROPE - A COMMENT -

HOW CAN WE ENSURE A FUNCTIONING ENERGY MARKET IN EUROPE - A COMMENT -. dr. Péter Kaderják Director, REKK European Parliament EPP- ED Hearing on the European Commission’s Green Paper on Energy 18 September, 2006. 1 - COMMON EXTERNAL POLICY ON ENERGY: A WAY TO SOURCE DIVERSIFICATION.

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HOW CAN WE ENSURE A FUNCTIONING ENERGY MARKET IN EUROPE - A COMMENT -

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  1. HOW CAN WE ENSURE A FUNCTIONING ENERGY MARKET IN EUROPE- A COMMENT - dr. Péter Kaderják Director, REKK European Parliament EPP-ED Hearing on the European Commission’s Green Paper on Energy 18 September, 2006

  2. 1 - COMMON EXTERNAL POLICY ON ENERGY: A WAY TO SOURCE DIVERSIFICATION • All major global partners have well-focused energy policies and active energy diplomacy (US, Russia, China) • EU misses to realize important opportunities for source diversification, e.g. in Central Asia • Russia can play a ‘divide and rule’ game in gas through bilateral agreements with carefully selected member states (Germany, Italy, Hungary)

  3. EXAMPLE OF NEW MEMBERS • For new member states the real issue is the risks of unilateral dependence on Russian supplies and not SoS • Price- and political risks versus security of supply • Competition followed by source diversification IS NOT the right order • Without source diversification price liberalisation will lead to high prices and will discredit the concept of (Russin-Russian) gas-to-gas competition • Might not hold for ‘old 15’

  4. ABUNDANT SOURCES OF GAS AVAILABLE 4,000 4500 km 47,570 33,530 Missing link between giant gas sources and potential markets (in bcm) 4,520 4

  5. PROBLEMS WITH THE PRESENT INFRASTRUCTURE, BUT…

  6. …DEVELOPMENT PLANS Russian – German Pact Russian – Italian talks ? Gazprom – MOL (HU) plans

  7. 2 - EUROPEAN ENERGY REGULATOR: HATED BUT NEEDED • 26 national regulators will never add up to a European regulator • Authority could strictly be limited to (1) regulate cross border transactions and (2) market surveillance • Quick, straight and transparent decisions are needed (consider the Florence process…)

  8. 3 - INCREASE THE CONTESTABILITY OF NATIONAL MARKETS • Consistent price liberalisation • Remove regulated prices for eligible customers (except for households) • Remove exclusive supply rights for incumbent providers connected to the tariff market segment • Do more about the TSOs • Accomplish / create incentives for the ownership unbundling of the TSO (take the Dutch)…or • Strengthen the antitrust oversight of the potentially anti-competitive behaviour of TSOs

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