§ Mr. HoodTo ask the Secretary of State for Trade and Industry what the outcome was of the Energy Council held in Brussels on 25 November; what the Government's stance was on the issues discussed, including its voting record; and if she will make a statement. [84004]
§ Mr. WilsonI represented the UK at the EU Energy Council in Brussels on 25 November.
512WThe Council considered several matters of interest to the United Kingdom. Chief among these was the internal market in electricity and gas on which there was agreement to full market opening by mid 2007.
During the discussion of the Gas and Electricity Directives, all member states agreed on the need for a firm date for full market opening, though one member state said that a final date should be subject to an interim review by the Commission.
The final agreement provides for the opening of the industrial and commercial market by mid 2004 and the opening of the market for all remaining consumers by mid 2007.
In discussions of the key issue of legal unbundling, the European Commission underlined that legal unbundling of distribution system operators and transmission system operators was a minimum requirement of a liberalised market while pointing out that it did not entail separate ownership of distribution and production. Some member states thought other approaches could also achieve the overall objective of market transparency and access to networks—arguing that member states should be allowed to retain measures having an equivalent effect to legal unbundling. The UK, supported by most other member states, disagreed and made it clear that legal unbundling was an essential part of the final package. The overwhelming evidence was that legal unbundling was essential to the development of a liberalised market with little evidence that alternative approaches would work as effectively.
The final agreement provide for legal unbundling of transmission system operators by mid 2004 and legal unbundling of distribution system operators by mid 2007. A Commission report published in 2006 will review the progress made towards liberalisation. It will also provide member states with the opportunity to request a derogation from the legal unbundling requirement for distribution if they can show that equivalent measures are just as effective. However, any such derogation will have to be decided by co-decision.
A Regulation on cross-border exchanges in electricity was also agreed as part of the compromise.
Revised criteria on support to projects under the Trans European Networks (TENS) energy programme were agreed.
Discussion of the EU's Intelligent Energy for Europe proposal, which provides for a new four-year programme of support for renewable energy and energy efficiency, centred on the budget. Agreement was reached on a figure of 190 meuro, a compromise between the 255 meuro sought by the European Parliament and the 150–160 meuro preferred by several member states.
Most member states supported the stated objectives of the Commission's Cogeneration proposal, which seeks to promote the cogeneration of heat and power in order to reduce energy demand as a means to both reduce dependency on external supplies of energy and contribute to the achievement of carbon savings, but thought the 50 MW upper limit on support restrictive, illogical and counterproductive, and that the proposal 513W involved bureaucratic and costly compliance burdens. The proposal will be taken forward by the Greek presidency.
Member states agreed on presidency conclusions on the follow-up to the World Summit on Sustainable Development (WSSD) in Johannesburg.
The Commission made a presentation on its package of nuclear proposals, comprising directives on nuclear safety and waste management together with a proposal for an agreement between Euratom and Russia covering trade in nuclear materials. The Commission justified this largely on the grounds of EU enlargement and the need to reassure public opinion on safety and waste management. Although discussion had not been envisaged, several member states expressed doubts about the treaty base for the proposals, stressing the political sensitivity. One noted that the Euratom Treaty did not provide the Community with competence on nuclear safety, and challenged the proposals as unrealistic.
The Council noted Commission progress reports on the EU-Russia energy dialogue (with adoption of conclusions), the Energy Charter Treaty and the Northern Dimension.
Greece gave a presentation on its presidency priorities. It will concentrate on four main areas: security of energy sources (energy TENS and the EU's proposed oil and gas stocking directives); sustainable development (cogeneration directive and follow-up to Johannesburg); co-operation with third countries (EU-Russia, Energy Charter Treaty, Euro-Med and North Eastern Europe); and continuation of work on the nuclear package.