Work
29.October 2004 - 00:00
Electricity price monitoring
Korhola's question: Given the current rise in electricity prices and the further increase expected when the European Emission Trading scheme comes into operation, how does the Commission plan to monitor prices to ensure that producers do not take unfair advantage from the situation (windfall profits)?
Answer given by Mr Piebalgs on behalf of the Commission
Electricity prices have generally fallen in the years since market opening began to be implemented. Prices for moderate industrial users (24GWh/year) are around 10-15% lower in real terms than in 1995. It is, however, true that recent increases in wholesale electricity prices have been recorded and that these increases have had a significant impact on the very largest users.
The Commission keeps market developments under close surveillance. It is required under the gas and electricity Directives (2003/54 and 2003/55)(1) to produce an annual report on the functioning of the electricity and gas markets. This will build on the existing benchmarking exercises that have been carried out since 2001. By the end of 2005 a more detailed periodic review will be undertaken which will examine whether any other measures are needed to support the functioning of competition. Finally, the Commission has recently begun issuing a quarterly report on prices, the first of which was placed on the Commission website(2).
Emission trading is expected to reduce the costs associated with meeting the Community’s environmental commitments and should therefore generally benefit European industry. However, the scheme is in its infancy and the interaction with electricity markets clearly needs to be examined as implementation occurs.
Should electricity consumers perceive that electricity prices are the result of restrictions of competition and abuses of dominant positions on electricity markets instead of a fair, competitive market process, they can also lodge complaints with national competition authorities or the Commission.
(1) Directive 2003/54/EC of the Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC – Statements made with regard to decommissioning and waste management activities, OJ L 176 , 15.7.2003, and Directive 2003/55/EC of the Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC, OJ L 176, 15.7.2003
(2) http://europa.eu.int/comm/energy/electricity/review/index_en.htm
Korhola's question: Given the current rise in electricity prices and the further increase expected when the European Emission Trading scheme comes into operation, how does the Commission plan to monitor prices to ensure that producers do not take unfair advantage from the situation (windfall profits)?
Answer given by Mr Piebalgs on behalf of the Commission
Electricity prices have generally fallen in the years since market opening began to be implemented. Prices for moderate industrial users (24GWh/year) are around 10-15% lower in real terms than in 1995. It is, however, true that recent increases in wholesale electricity prices have been recorded and that these increases have had a significant impact on the very largest users.
The Commission keeps market developments under close surveillance. It is required under the gas and electricity Directives (2003/54 and 2003/55)(1) to produce an annual report on the functioning of the electricity and gas markets. This will build on the existing benchmarking exercises that have been carried out since 2001. By the end of 2005 a more detailed periodic review will be undertaken which will examine whether any other measures are needed to support the functioning of competition. Finally, the Commission has recently begun issuing a quarterly report on prices, the first of which was placed on the Commission website(2).
Emission trading is expected to reduce the costs associated with meeting the Community’s environmental commitments and should therefore generally benefit European industry. However, the scheme is in its infancy and the interaction with electricity markets clearly needs to be examined as implementation occurs.
Should electricity consumers perceive that electricity prices are the result of restrictions of competition and abuses of dominant positions on electricity markets instead of a fair, competitive market process, they can also lodge complaints with national competition authorities or the Commission.
(1) Directive 2003/54/EC of the Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC – Statements made with regard to decommissioning and waste management activities, OJ L 176 , 15.7.2003, and Directive 2003/55/EC of the Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC, OJ L 176, 15.7.2003
(2) http://europa.eu.int/comm/energy/electricity/review/index_en.htm