Energy Council (Hansard, 18 December 1997)

§ Mr. Battle

The Council considered several issues and received reports on matters of interest. I represented the UK.

Council reached political agreement on a draft common position on the gas liberalisation directive. The main elements of the agreement include a requirement for a minimum initial market opening of 20 per cent., increasing to 28 per cent., after five years from entry into force and 33 per cent. after ten years. All gas-fired power generators will, from the beginning, be able to obtain competitive supplies. Initial thresholds for eligible industrial customers were set at 25 million cubic metres (mcm), dropping to 15 mcm after five years and 5 mcm by year ten. Member States were given the option to introduce separate arrangements for the inclusion of industrial combined heat and power producers.

The agreement also includes provision for eligible customers and third party suppliers to have access to gas transportation networks and requires Member States to put in place an independent authority to settle disputes about access. Network companies will be required not to abuse information received from third parties and to publish the main commercial conditions for use of their network. The agreement also contains provisions to provide access to upstream pipelines in a manner which takes account satisfactorily of the particular nature of upstream activity.

The draft common position recognises that market opening could lead to transitional problems for major gas companies and allows Member States, subject to clearance by the Commission, to agree to the possibility of their companies refusing network access where competition leads to serious financial difficulties in respect of long term take or pay contracts. Transitional arrangements will also be available to countries or areas of countries without a developed gas supply infrastructure (the latter subject to Commission authorisation) where the immediate implementation of the directive would create difficulties concerning the promotion of investment in gas networks.

The Government welcome the agreement reached as a first step in opening the EU market for natural gas. Liberalisation will boost EU competitiveness and bring the UK new opportunities for trade, investment and employment. The draft common position is compatible 316W with the existing competitive arrangements in the UK market. The proposal will be submitted to the European Parliament for consideration during the UK Presidency once a formal common position has been adopted.

The Council received a presentation from the Commission on a White Paper and Action Plan on a strategy for the future of renewable sources of energy and a reached common position on a Council decision concerning a multinational programme for the promotion of renewable energy sources in the Community—ALTENER II. A two year programme with a budget of 22 mecu was agreed. I gave my full support to the ALTENER II programme which I regard as an important element in the Commission's proposals to increase the use of renewable energy sources.

Council approved a resolution on combined heat and power. The resolution welcomed the publication of a Community strategy to promote CHP recognising its positive contribution to environmental policies particularly towards the target to reduce greenhouse gas emissions, and invited the Commission to continue its work.

Council approved a proposal to extend the SYNERGY programme aimed at the promotion of international cooperation in the energy field. A one year extension with a budget of 5 mecu was agreed subject to formal receipt of the European Parliaments opinion.

In addition, the Council received presentations from the Commission on its proposal for a Council decision for a multiannual energy framework programme for actions in the energy sector, and a progress report on the Energy Charter Treaty.