As part of the process of assessing the status of finalising the Internal Energy Market (IEM), the European Commission at the end of 2012 presented a Communication on the state of play in EU-27. This material is valuable for the investors in the energy sector in Europe, as it provides a comprehensive analysis of the progress reached so far under the IEM policy, as well as a road map of the priorities for the energy markets in each member state. The CEE markets share common features such as high market concentration, regulated prices for the final customers, and the need to develop and/or improve their interconnection infrastructure.
This newsletter looks briefly at the key findings of the analysis across the EU and then focuses on the priorities that the CEE markets need to address, as well as a snapshot of regulated electricity and gas prices and the pending infringement procedures for the member states in the CEE region.
As part of the process of assessing the status of finalising the Internal Energy Market (IEM), the European Commission at the end of 2012 presented a Communication on the state of play in EU-271. The Commission envisages the completion of the Internal Energy Market by 2014.
The Staff Working Document reports in detail on: facts and figures for energy consumption and supply for conventional and renewable energy in the EU, the developments of the wholesale and retail markets, unbundling and market structure, country reports, and the status of the infringement procedures under the 2nd and 3rd Energy Packages.
This material is valuable for the investors in the energy sector in Europe, as it provides a comprehensive analysis of the progress reached so far under the IEM policy, as well as a road map of those energy market priorities that from the Commission's perspective are crucial to ensuring that the jigsaw of 27 electricity and gas markets come together under one functional system.
Key Findings for the EU-27
Currently the EU is not on track to meet the 2014 deadline for the completion of the IEM;
- Increased share of renewable energy: renewable energy represents 12.5% of EU energy consumption, up 4% in the last five years; there is some evi-dence of energy savings, especially by the industrial customers;
- Production of crude oil declined;
- Production of natural gas and nuclear energy – slight increase;
- Slight fall in import dependency: 52.7% from the peak of 54.6% in 2008;
- Fall in LNG imports;
- Continued increase of the oil-indexed prices in long-term gas supply agreements; this marks a reversal from the trend in 2010, when the gap between oil-indexed prices and gas-to-gas prices was narrowing;
- Hub-traded gas increased (up to 37% in 2010 from 27% in 2009);
- Increased liquidity of the power markets and higher integration of the EU power markets due to market coupling;
- The switching rates of the supplier are still too low both for electricity and gas. The main cause for this is that electricity and gas prices for final cus-tomers are still regulated in a substantial number of member states.
Priorities for the CEE member states
Regulated Prices for Electricity and Gas
All CEE member states, except the Czech Republic and Hungary, have at least one case of infringement procedures pending. Most of the infringement procedures are for the non-transposition of the 3rd Energy Package.
All member states in the CEE region -- except Austria, the Czech Republic and Slo-venia -- still maintain regulated prices for both household and non-household customers.
The Staff Working Document can be viewed here http://ec.europa.eu/energy/gas_electricity/doc/20121217_energy_market_2011_lr_en.pdf.
1. Commission Staff Working Document SWD(2012) 368 final of 15 November 2012 accompanying the Communication "Making the internal energy market work" (COM(2012)663 final)
2. Transmission System Operator
3. Distribution System Operator
4. Based on the national legislation notified by the member states until 29 October 2012
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