The European Parliament,

–   having regard to the Commission Communication An Energy Policy for Europe (COM(2007)0001),

–   having regard to the Commission Communication Prospects for the internal gas and electricity market (COM(2006)0841),

–   having regard to the Commission Communication Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (COM(2006)0851) and to the accompanying Commission staff working document - DG Competition report (SEC(2006)1724),

–   having regard to the Commission Communication Priority Interconnection Plan (COM(2006)0846),

–   having regard to the Commission staff working document Implementation Report on the prospects for the internal gas and electricity market (SEC(2006)1709) – Accompanying document to the Commission Communication (COM(2006)0841),

–   having regard to the Commission staff working document on EU energy policy data (SEC(2007)0012),

–   having regard to its resolution of 14 December 2006 on a European strategy for sustainable, competitive and secure energy – Green paper(1),

–   having regard to its resolution of 23 March 2006 on security of energy supply in the European Union(2),

–   having regard to Decision No 1364/2006/EC of the European Parliament and of the Council of 6 September 2006 laying down guidelines for trans-European energy networks(3),

–   having regard to its position adopted at second reading on 23 May 2007 with a view to the adoption of a regulation of the European Parliament and of the Council laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks(4),

–   having regard to Directive 2005/89/EC of the European Parliament and of the Council of 18 January 2006 concerning measures to safeguard security of electricity supply and infrastructure investment(5),

–   having regard to Regulation (EC) No 1775/2005 of the European Parliament and of the Council of 28 September 2005 on conditions for access to the natural gas transmission networks(6),

–   having regard to Council Directive 2004/67/EC of 26 April 2004 concerning measures to safeguard security of natural gas supply(7),

–   having regard to Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity(8),

–   having regard to Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural(9),

–   having regard to Regulation (EC) No 1228/2003 of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity(10),

–   having regard to the Annual Report of the European Energy Regulators for the period 1 January 2006 to 31 December 2006 to all members of the Council of European Energy Regulators (CEER) and the European Regulators Group for Electricity and Gas (ERGEG), the European Parliament, the Council of Ministers and the European Commission, made under Article 3(8) of Commission Decision 2003/796/EC of 11 November 2003 on establishing the European Regulators Group for Electricity and Gas(11),

–   having regard to the Presidency Conclusions of the European Council of 8 and 9 March 2007, concerning the European Council's endorsement of a European Council Action Plan (2007-2009) – Energy Policy for Europe,

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on Industry, Research and Energy and the opinions of the Committee on Economic and Monetary Affairs and the Committee on Regional Development (A6-0249/2007),

A.   whereas the European Union's new energy policy for sustainable, secure and competitive energy needs to be ambitious and aimed at long-term benefits, with the main focus on combating climate change, limiting the EU's external vulnerability to imports, and promoting growth and jobs,

B.   whereas an adequate legislative framework in accordance with the principle of sudsidiarity must be established in a timely manner in order to achieve these ambitious, long-term benefits,

C.   whereas the completion of the internal energy market and the creation of effective solidarity mechanisms between Member States are prerequisites for guaranteeing security of supply and economic efficiency,

D.   whereas liberalisation and market integration are of equal importance in facilitating cross-border trade, achieving greater economic efficiency and increasing market liquidity, and thus completing the internal energy market,

E.   whereas decisions about the energy mix in a Member State have consequences for the entire Union as regards competition, security of supply and environmental sustainability,

F.   whereas the principles of social inclusion and equal opportunities for all mean that it is essential for every Union citizen to have affordable access to energy,

G.   whereas 20 out of the 27 Member States are yet to fully transpose Directives 2003/54/EC and 2003/55/EC in word and in spirit,

H.  Whereas the abovementioned Commission Communication on the prospects for the internal gas and electricity market and the DG Competition report on the energy sector inquiry conclude that the present rules and liberalisation measures have led to efficiency improvements in energy supply and delivered savings to customers, but that markets have not yet been fully opened and barriers to free competition still remain,

I.   whereas the establishment by national regulators of strong and effective harmonised rules on network access together with effective unbundling are pre-requisites to allowing new entrants to enter the market,

J.   whereas in some Member States long-term contracts apply to a substantial proportion of the market, thereby jeopardising the development of free competition and hence the completion of the internal energy market,

K.   whereas the implementation of existing EU unbundling provisions and regulatory frameworks in Member States vary considerably and this has serious implications for the development of the internal electricity market,

L.   whereas the convergence and synchronisation of national action with regard to the unbundling provisions is the only way to proceed towards the completion of the internal energy market,

M.   whereas most gas undertakings' profits are generated mainly by their trading activities rather than gas extraction,

N.   whereas few Member States have opened their gas markets; whereas lower prices and a quality service in the supply in the gas market are key for the whole system, both for consumers and undertakings,

O.   whereas reducing congestion in the transmission of electricity requires both massive investment in the expansion and upgrading of the electricity grid and more efficient market-based congestion management mechanisms,

P.   whereas any proposed new legislation should tackle the specific problems faced by energy intensive industries, such as the high energy prices derived from the lack of competition in the markets,

Q.   whereas interconnection levels between several Member States are still insufficient, far from the agreements adopted at the Barcelona Summit of 15 and 16 March 2002 and, in many cases, a variety of political and administrative impediments are the root cause of the delays in their construction,

R.   whereas, before proposing any legislation on the mandatory creation of gas storage facilities in each Member State, the Commission should put forward a cost benefit study and a thorough impact assessment,

S.   whereas liberalisation and market integration are of equal importance in completing the internal energy market,

T.   whereas the final sentence of point 33 of the abovementioned Presidency Conclusions of the European Council on 8 and 9 March 2007 states the great importance of the energy-intensive sector and emphasises that cost-efficient measures are needed to improve both the competitiveness and the environmental impact of such industries,

U.   whereas lack of transparency has been identified by the Commission as a barrier to the promotion of competition in the internal market,

V.   whereas there is a need for a clear, stable and predictable regulatory framework for the long-term investments that are necessary in the energy sector,

W.   whereas a European Union public energy authority could help to finance research and the development of renewable energies, maintain tariff equalisation and ensure equal access to energy for all citizens,

X.   whereas the available data suggest that Member States have made only limited use of targeted public service obligations to address vulnerable customers,

1.  Reiterates that the Lisbon Strategy can be a success only if further efforts are made to establish a common energy policy based on a broader vision of the common European interest in the energy field by respecting national characteristics and allowing Member States to adhere to their energy mixes in order to diversify energy sources and energy producers as much as possible;

Transmission unbundling

2.  Considers transmission ownership unbundling to be the most effective tool to promote investments in infrastructures in a non-discriminatory way, fair access to the grid for new entrants and transparency in the market; underlines however that this model might not address all of the issues at stake such as interconnections or congestion points;

3.  Recognises that the application of further unbundling measures for the gas sector is not straightforward; therefore urges the development of specific solutions to enable the completion of the internal gas market, taking into account the differences between the upstream and downstream markets;

4.  Calls on the Commission to present an analysis in which the expected costs of ownership unbundling and of establishing independent system operators for the Member States, the expected effects on investment in the networks, as well as the benefits for the internal market and consumers are demonstrated; points out that the analysis should address the question whether, and if so what problems or costs would arise if no unbundling is carried out by the state as well as the question whether the negative consequences differ as between state and private ownership; suggests furthermore that the analysis should consider what the advantages would be of an ownership unbundling compared to the independent regional market operator approach as regards the achievements of objectives;

5.  Urges the Commission to consider the structural differences between the EU electricity and gas sectors, including the fact that, some Member States have no indigenous production of these sources of energy and that, in important gas upstream markets, full economic reciprocity is not currently guaranteed; calls therefore on the Commission to come forward with a balanced proposal allowing EU gas emissions to use new upstream pipeline investments and long-term contracts in order to raise their negotiating power vis-à-vis third countries;

6.  Insists that no third country company should be allowed to purchase energy infrastructure unless there is reciprocity with that country;

Regulators

7.  Welcomes the Commission's proposal to enhance cooperation between national regulators at EU level, through an EU entity, as a way to promote a more European approach to regulation on cross-border issues; considers that increased convergence and harmonisation of the competences of national regulators is essential to overcome technical and regulatory differences that impose serious barriers to cross-border trade and interconnections; emphasises that the Commission should play a determining role, whilst not undermining the independence of national regulators; believes that decisions by the regulators should be made on specifically defined technical and trade issues and on an informed basis considering, where appropriate, the views of transmission system operators (TSOs) and other relevant stakeholders, and should be legally binding;

8.  Points out that national regulators should remain the only authority responsible for decisions affecting their national market only; is in favour of their competences being extended to include the drawing up of an inventory of required investment and the active promotion of the implementation thereof;

9.  Believes that regulators must ensure that any company owning energy infrastructure, and in particular transmission networks or pipelines, undertakes to meet clearly defined investment targets in order to avoid speculation in this area;

10.  Believes that national regulators should be independent, strong and have well-defined competences in order to ensure that the law is fully implemented in practice and is adhered to by market players and that the necessary investments and transparency levels are in place; believes, furthermore, that their competences should be harmonised at EU level via the establishment of common rules on transparency, disclosure and accountability in order to ensure they are fully independent of national authorities and industry;

11.  Believes that national energy regulators should be given the role of penalising operators which do not respect their decisions or transmission operators who fail to meet their network maintenance obligations, of ensuring that energy companies provide advice to end users on energy and-use efficiency as laid down in Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services(12) and of imposing electricity and gas release programmes; believes further that mutual cooperation between regulatory authorities and the relevant competition authorities should be strengthened at both national and EU level;

12.  Calls on the Commission to provide a solution to the problems of independence/conflicts of interests and transparency with regard to TSOs; calls on the Commission to put forward proposals that enable TSOs to fulfil their responsibility as market facilitators and to harmonise the international regulations for TSOs so as to improve cross-border transport;

13.  Welcomes the proposal to grant existing associations of TSOs an official role with formal obligations and objectives (the ETSO+\GTE+ solution);

14.  Criticises the excess interventionism of some governments in the decisions taken by national regulators, as this undermines the latter's role as independent authorities;

15.  Notes the development of some regional markets; points out that appropriate measures will be required to prevent the creation of bigger "energy islands" and demands that these regional structures not endanger the completion of the internal energy market;

Regulated tariffs

16.  Urges Member States to gradually end the application of generalised regulated tariffs – with the exception of last resort tariffs as referred to in Directive 2003/54/CE – whilst ensuring that there are adequate measures to protect vulnerable customers, particularly in terms of fuel poverty, including non-market based mechanisms; regrets the lack of reference in the abovementioned Commission Communication on an energy policy for Europe to price mechanisms; recalls that intervention on prices should only be allowed, as a last resort, where national regulators seek to control soaring prices that are artificially stimulated, in order to prevent harm to consumers, businesses and new entrants, but also that prices should in any case cover the real costs;

17.  Considers that subsidies for non-renewable sources of energy should be eliminated, thereby ensuring a level playing field, that external environmental costs should be internalised in the price of energy and that market-based instruments should be used to achieve environmental and energy policy objectives;

18.  Notes that targeted high-standard universal service obligations and public service obligations should comply with State aid rules and that competition law applies with respect to price discrimination and restrictions on re-sale; stresses that it is of crucial importance to assess the impact of the remaining regulated supply tariffs on the development of competition, and to remove market distortions;

Social impact and consumer protection

19.  Asks the Commission to present full impact assessments including the evaluation of the social effects of its different proposals and to support the industries in developing mechanisms for training and redeployment;

20.  Believes that supplying consumers with energy to meet basic needs is indispensable and that energy poverty must be combated using all available means, in particular by encouraging energy savings and energy efficiency; moreover, calls for appropriately targeted and transparent social measures which, while not impeding fair competition, are needed to protect vulnerable and disadvantaged consumers;

21.  Urges the Commission to present its proposal for an Energy Consumers' Charter by the end of 2007;

Interconnections

22.  Welcomes the indicative objective of achieving interconnection levels of 10% in Member States;

23.  Calls on the Member States to increase their efforts, including through the strengthening of bilateral cooperation, to remove technical, administrative and political barriers to the completion of existing and future projects, in particular the four projects identified by the Commission as projects of Community interest; asks Member States to facilitate authorisation procedures for the building of interconnection lines and to limit the duration of the procedures; considers, however, that considerations of general interest should always be taken into account;

24.  Reaffirms the need to increase the budget allocated to trans-European energy networks for, in particular, removing environmental obstacles;

25.  Calls on the Commission to accelerate the appointment of EU coordinators for projects of Community interest which are experiencing problems with implementation;

26.  Emphasises that decentralised energy infrastructure and generation can help to bring about a higher level of security of energy supply and should be encouraged when energy policy strategies are drawn up;

Long-term contracts

27.  Recognises that upstream long-term contracts, in particular in the gas sector, are necessary to provide a positive investment climate and that they contribute significantly to security of supply and do not harm the integration of the internal energy market, provided that new entrants are not excluded;

28.  Believes that balanced, effective application of the 'use-it-or-lose-it' principle must be ensured so that new entrants may access the networks where capacity is not utilised;

29.  Believes that downstream bilateral long-term contracts, as long as they do not take up a significant percentage of the market and do not prevent customers from switching suppliers, enable energy intensive industries to negotiate more competitive and stable energy prices with the supplier of their choice and that they should therefore be permitted, assuming that they are properly supervised by the relevant authorities and as long as they do not create additional costs for the networks, close the market to new entrants or hamper market development;

30.  Calls on the Commission to propose a definition of what constitutes a high energy user and to give special consideration to high energy users in the EU that are competing in the global economy;

31.  Asks the Commission to provide clear guidance on downstream bilateral long-term contracts in order to reduce uncertainty in the market and to move towards standardisation of contracts;

32.  Recalls that energy generation, transmission, storage and distribution facilities are critical infrastructures the safety and security of which must be fully preserved and ensured under all circumstances;

Electricity grid and gas networks

33.  Reiterates its concern over the investment needed to upgrade the electricity grid and gas networks to ensure the security of supply in EU; insists on the stability, coherence and transparency of the regulatory framework in order to create an investment-friendly environment and therefore calls for the development of such a regulatory framework for the shared benefit of consumers and businesses in the EU;

34.  Regrets that many obstacles still remain in Members States that cause disproportionate delays in the creation of new energy import infrastructures and in the connection of new generation to the main electricity grid; therefore calls on national, regional and local authorities to take all necessary steps to ensure that these delays are reduced to the strict minimum and that every inhabited remote and inaccessible area (including islands and mountainous areas) is connected to the main electricity grid;

35.  Urges the Member States to facilitate an increase in grid capacity in order to allow the incorporation of new massive onshore and offshore renewable energy generation; calls on the Commission to assess the feasibility of creating an EU smart-grid taking full advantage of the latest information and communication technologies available, one which would accommodate a wide variety of generation options, empower the consumer and be able to rapidly detect and analyze disturbances and respond to and remedy their effects; urges the Member States to favour related investments and to give their regulators an explicit mandate to favour the achievement of these goals;

36.  Emphasises the need for the technical harmonisation of EU networks;

37.  Calls on the Commissions to draw up a road map for the creation of a single EU electricity and gas network;

38.  Welcomes the recent technological progress in feeding biogas into the gas network; urges the Commission to propose concrete measures to exploit this potential more extensively, so as to contribute to the security of gas supply, notably to guarantee access to the biogas network;

Strategic stocks

39.  Agrees with the Commission's assessment that, in relation to gas, considering the present technology, it is better to diversify supply routes and technologies, such as degasification plants and liquefied natural gas terminals, than to create massive gas stocks; calls on the Commission to submit specific proposals for making better use of existing gas stocks without disturbing the balance between security of supply and favouring new market entrants;

40.  Stresses the complementarities of the electricity grid and the gas network; in this context, points out that storage is an integral part of the gas network and should be managed in a spirit of national and Union solidarity; also believes that storage could support stand-by generators of electricity and thus aid security of supply;

41.  Notes that strategic gas stocks may be proposed and developed by individual Member States according to their economic and technical feasibility;

Transparency

42.  Believes that transparency is a prerequisite for the development of competition and that information should always be disclosed in a timely, clear and easily accessible way and on a non-discriminatory basis;

43.  Notes the difficulties that household consumers encounter in benefiting from liberalised markets; urges the Commission to put forward concrete proposals on how to enhance transparency for consumers; to make consumer information complete and clear (including the various tariffs available, the company's energy mix and other useful information such as labelling, as referred to in Directive 2003/54/EC) and to strengthen the role of consumer organisations in the internal energy market;

44.  Agrees with the Commission on the need to introduce binding rules on transparency for both the electricity and the gas markets; believes that a high, harmonised level of transparency promotes efficient competition and brings new entrants to the markets;

45.  In this respect, welcomes the Commission's commitment to ensuring better transparency in the markets;

Implementation of Community legislation

46.  Is concerned at the number of Member States who are still to transpose Directives 2003/54/EC and 2003/55/EC and those who have failed to implement them properly; calls on the Member States to transpose and fully implement these directives without delay;

47.  Believes that Directives 2003/54/EC and 2003/55/EC contain sufficient provisions that, if properly applied, would ensure a competitive scenario and the completion of the internal energy market;

48.  Agrees with the Commission that there is no alternative to the liberalisation process and calls on Member States to ensure full and effective transposition of existing liberalisation directives; moreover, endorses the Commission's proposal to address the malfunctioning of the market by applying both competition-based and regulatory remedies;

49.  Calls on the Commission to publish all the results of and the answers received in its impact assessment study and to inform it thereof before presenting new legislative proposals;

50.  In this respect, welcomes the Commission's initiative to open infringement procedures against those Member States that have failed to transpose or correctly implement Directives 2003/54/EC or 2003/55/EC;

51.  Warns against excessive market concentration and considers that this would be best addressed via further progress in market integration and in regulatory measures, as there should be consumer choice of supplier in an open competitive environment; reiterates its call on the Commission to take further steps to address concentrations in the energy market in cases of abuse of market dominance;

52.  Draws attention to the fact that, although developments in coordinating the distribution of cross-border capacity are encouraging, the low level of transparency in the calculation of the net transfer capacity required for auctions and in the determination of the available transfer capacity constitutes a serious obstacle to competition, one which needs to be tackled by introducing stricter regulations relating to the concerted practices which have been found to occur at auctions and by stepping up anti-trust monitoring;

53.  Urges the Commission to closely supervise the impact of concentration on competition, both at national and at EU level, taking also into consideration the current consolidation process that is giving rise to new, large, multinational energy undertakings active in a significant number of Member States and with a high degree of vertical and gas-electricity integration;

54.  Believes that public ownership in the electricity and gas markets is one of the main causes of distortions at EU level and that the stimulus for competition in those markets is reduced if there are public enterprises, because, in most cases, by virtue of their company statute, there is a lower level of transparency and less information for potential investors and because they are dependent on political decisions taken by Member State governments;

55.  Invites the Commission in all its actions and proposals to take account of the importance of the role of small and medium-sized energy companies to the functioning of competitive energy markets;

56.  Calls on the governments of the Member States to stop the promotion of the so-called national champions and to refrain from passing protectionist legislation preventing the development of a truly integrated EU energy market; calls for the establishment of active gas and electricity release programmes and more liquid balancing markets in order to favour new market actors;

57.  Considers it essential that a future, modified Emissions Trading Scheme be fully integrated into the liberalised energy market in a transparent way and under the supervision of national regulators so as to avoid causing distortion in market mechanisms;

58.  Reiterates the importance of achieving a fully liberalised EU energy market as soon as possible and insists on the Commission's presenting its package of additional measures for the internal market in late September 2007, as announced;

o
o   o

59.  Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.

(1) Texts adopted, P6_TA(2006)0603. (2) OJ C 292 E, 1.12.2006, p. 112. (3) OJ L 262, 22.9.2006, p. 1. (4) Texts adopted, P6_TA(2007)0198. (5) OJ L 33, 4.2.2006, p. 22. (6) OJ L 289, 3.11.2005, p. 1. (7) OJ L 127, 29.4.2004, p. 92. (8) OJ L 176, 15.7.2003, p. 37. (9) OJ L 176, 15.7.2003, p. 57. (10) OJ L 176, 15.7.2003, p. 1. (11) 7 OJ L 296, 14.11.2003, p. 34. (12) OJ L 114, 27.4.2006, p. 64.