The Dynamics of Eu External Energy Relations: Fighting for Energy by Francesca Batzella

Author:Francesca Batzella [Batzella, Francesca]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9781351804202
Google: ntZCDwAAQBAJ
Goodreads: 37571185
Publisher: Routledge
Published: 2017-12-12T00:00:00+00:00

Status quo: member states depending on only one gas supplier

Other member states – such as Cyprus, Czech Republic, Estonia, Ireland, Lithuania, Poland, Slovenia – were against OU, although they did not join the group proposing a third option. member states belonging to this third subgroup were particularly concerned that OU would have a negative impact on their gas market because they were not interconnected, with centralised and limited gas markets or were heavily dependent on one external supplier. In addition, these countries were particularly concerned that the third country clause – as in the Commission’s proposal – would have weakened their position vis-à-vis their main suppliers.

Small island states, such as Cyprus, and countries with a centralised and limited market in gas, such as Czech Republic, seemed concerned that OU could have had a negative impact. Cyprus, for instance, argued that OU ‘would give rise to additional, increased administrative and operational expenses which would have a direct negative impact on consumers’ (Council of the European Union 2007q). In order to avoid such consequences, then, the decisions on further unbundling measures should be ‘left to the discretion of the member states (principle of subsidiarity)’ (ibid.). Similarly, the Czech Republic had serious concerns that ownership-separated companies might see their market position significantly weakened, thus also affecting their negotiating position in relation to capital-powerful suppliers. Their concern was that this weakened position could be reflected in prices for end customers (Council of the European Union 2007f). Estonia was also concerned about the consequences that OU could have on member states with only one (monopoly) supplier on the market, as well as deliveries from only one source (Council of the European Union 2007k).

Lithuania expressed the opinion that, before proposing new legislation on OU, the Commission should have assessed the ‘influence of vertically integrated companies from the third countries on the liberalised EU market’ as a ‘topical issues’. More precisely, the Lithuanian delegation argued that the EU internal energy market needed to be protected from distortion of competition by the vertically integrated energy companies from the third countries. Lithuanian concerns are sensible if we think that Lithuanian gas is supplied from a single external gas supplier, Gazprom, and the degree of integration in the gas market is low because Lithuania has a single interconnection with the EU member states (interconnection with Latvia), which is meant to ensure gas supply solely in extreme situations (Council of the European Union 2007n).

The position of Poland was that the full implementation of Directive 2003/55/EC provided ‘sufficient foundation for creating a uniform market for natural gas’. Poland feared that should the ownership unbundling be properly defined, external gas suppliers to the EU would pose a threat to taking over natural gas enterprises. More precisely, Poland did not support OU of the Distribution System Operators because it could mean such enterprises would need to be sold, leading to a situation where ‘the dominating natural gas supplier takes over strategically important market segments’. According to the Polish delegation, this was the case, as

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