In June 2009, the Commission started infringement procedures against 25 member states for electricity and against 21 member states for gas. Key violations identified by the Commission include lack of transparency, insufficient coordination efforts by transmission system operators (TSOs) to make maximum interconnection capacity available, absence of regional cooperation, a lack of enforcement action by the competent authorities in member states and a lack of adequate dispute settlement procedures.

In October 2009, the Commission launched further infringement proceedings, notably against Belgium over its gas transit system and another member state over gas storage. The Commission’s infringement actions also resulted in the European Court of Justice censuring Sweden and Belgium (over the competences of the national regulatory authorities with regard to network tariffs) and Belgium for failing to designate a gas TSO.

The Commission further notes a failure to adjust market prices to end-users following the significant fall in the consumption of gas and electricity in 2009. Lower consumption, due to the economic crisis, also had an important impact on the international oil prices (in turn influencing gas and electricity prices). «However, the fall witnessed in oil prices on the international market has not been entirely reflected in end-user gas and electricity prices,» notes the Commission.

The Commission also picks up on the high rates of concentration on energy markets. In ten member states, the three largest gas wholesalers have a market share of 90% or more ⁽¹⁾. The share of the three largest companies fell in only five countries (Belgium, France, Hungary, Italy and Spain). However, notable increases in the overall market shares of the largest three suppliers were seen in Romania and, most spectacularly, in Bulgaria (+57%). In the electricity retail market, the market share of the three largest companies was above 80% in 14 member states.

Year on year, the EU-27 electricity consumption remained relatively stable, but fell by 12% and 7% in April and May 2009 respectively. The decline in gas consumption was even more significant. Between January and March 2009, gas consumption (in the EU-27) dropped by around one-fourth. «This drop is partly due to the interruption of gas supplies from Russia via Ukraine, but even after the crisis in March 2009 EU-27 gas consumption was still more than 16% down on the March 2008 level,» notes the Commission’s 15-page report. Obviously, the cold and long winter in 2010 will affect consumption figures in the next report.

One positive element is that member states are seen as becoming increasingly involved in regional integration. The Commission points to a memorandum of understanding on the Baltic Energy Market Interconnection Plan (BEMIP) signed in June 2009 between the Commission and a number of Baltic Sea member states (Denmark, Estonia, Latvia, Lithuania, Poland, Finland and Sweden). In December 2009, a memorandum of understanding was signed regarding the Central Eastern European forum for electricity market integration (between Austria, the Czech Republic, Germany, Hungary, Poland, Slovakia and Slovenia).

«The full and correct implementation of the energy rules has still not been achieved,» admitted EU Energy Commissioner Günther Oettinger. «This situation needs to change and the Commission will use all means available to make this happen.»

The report is available at  www.europolitics.info > Search = 268231