Whilst the energy industry is still forming its opinion on the third package of energy liberalisation measures, Eurogas Secretary-General Jean-Marie Devos is already pointing to a lack of clarity in the text of the interinstitutional agreement hammered out on 23-24 March (see Europolitics 3721). Eurogas, which brings together gas companies and national federations, sees clarity as essential for companies making the investment and business decisions needed to build a secure and competitive European energy market.

Are you happy this package of legislation has been agreed upon?

The fact that there is agreement is already a success. Just think of the long discussions in the past two years on unbundling modalities. This is a major political compromise on difficult issues. That said, I do have reservations when looking more closely at the quality of the legislation agreed upon. It is a very complicated package, sometimes unclear, with passages that appear contradictory. Even at this late stage, the legal specialists of our companies still have different interpretations. This legislation, however, will soon have to be transposed and implemented. This gas directive should not lead to ‘regulatory overburden’, not only for regulators but also for citizens and business.

What is your opinion on the European Network of Transmission System Operators (ENTSO) for gas? Are you happy with the solution found?

Eurogas supports stronger cooperation between transmission system operators (TSOs) in order to improve efficiency and facilitate gas movements in the EU. The proposed legislation should be seen as a step forward here but will have to be tested. Eurogas also wants suppliers and grid users to be effectively consulted. TSOs should provide the best possible services to their customers.

Could the legislation, especially with respect to gas, create confusion?

There was a general feeling of exhaustion at the end of negotiations on the whole package. This is not per se a guarantee for better regulation or legislation. The impression that I have is that even those strongly in favour of the package now realise it may not be the best law produced from a better regulation and legal point of view. But this legislation will have a huge impact on industry, including structural ones.

Can you give an example of where the package is unclear?

Provisions on the exemption regime, now Article 35, for new infrastructures are in principle welcome. However, the text may send mixed signals to investors. Eurogas requested that regulatory decisions take into account the specificities of each project, such as regulatory difficulties, physical conditions and licensing procedures.

Why are the two and five-year sunset clauses on granted exemptions so worrying for you?

Industry will now have the burden of demonstrating major obstacles beyond their control preventing the start of works before that period or the fact that infrastructure has not yet become operational. This does not take account of the fact that you need a lot of time when you undertake huge infrastructure projects. Think of the Nabucco pipeline to bring gas from the Caspian region to Europe. Imagine for administrative, environmental or other reasons, you cannot start the construction of the infrastructure on time. What happens then? Will the whole project collapse? That is the type of question that investors will have. We hope that the Commission, the national regulatory authorities and the Agency for the Cooperation of Energy Regulators (ACER) will apply the text in a realistic and supportive manner.

Is the agency strong enough?

The idea behind the ACER is powerful. But the real powers given to the agency are limited, except perhaps as regards the regime for granting exemptions to major infrastructure projects. But as mentioned we even have doubts here as to the clarity of the text. For investors, clarity and legal certainty are extremely important before committing to major projects.

What are your feelings on the ‘third country’ clause?

It was not industry that pushed for this clause. Here, the member states have to decide. The way it is drafted today is clearly a typical EU compromise. There are fears that it may harm harmonisation in the market and prevent a level playing field between companies.

Have consumer rights really been strengthened? Is this economically feasible?

We serve a market. Both private and industrial customers are priorities for us. Contractual freedom and transparency must prevail. A number of consumer protection principles are welcome. A balance, however, must be achieved for the system and the cost must remain economically feasible.