Energy shake-up or just reshuffling regulatory competences?

Implications:

Analysis: The significance of the European Commission announcements on 10 January lies in the manner in which its work on electricity and gas market reform, energy competition and greenhouse gas emissions has been closely coordinated more than ever before. Different Directorates-General (DGs) have combined to pave the way for a proposed third EU legislative package.

We will see that the core elements of such a package will center around greater unbundling of transmission businesses from linked production and supply businesses and around a strengthening of energy regulators' powers.

The final DG COMP report findings from the European Commission's electricity and gas sector inquiry have been published as part of the set of documents. But there is not actually very much on the antitrust side which is new and concrete. Some individual corporate investigations are underway, especially in the gas sector, yet DG COMP may lack evidence of real abuses. In addition, potential third party complainants have hesitated to come forward.

The game between the Commission as a whole, the MemberState governments and the national integrated energy champions those governments in some cases "protect" now becomes one of threat, bluff and counter-bluff following publication of the 10 January documents. 

Over the medium to long term the Commission's insistence on stricter unbundling, more harmonized conditions of transmission access across national boundaries, greater transparency, and overall ease of market entry will lead to fundamental restructuring of parts of the European power and gas sectors. That process has already reached a mature stage in Britain and in Scandinavia (at least on the power side), has started in Italy, Spain, the Netherlands and Switzerland, but has yet to take hold in France, Germany and much of eastern Europe.