Energy is one of Prague's three e's, sandwiched between economy and external relations(1). Although given top priority by the Czechs, energy has clearly come down from the stars. There is little chance of the same passions being expressed on the more technical issues to be handled in this half of the year, such as energy efficiency in buildings and the revision of EU rules on oil stocks.

Such "technical" issues pale in their divisive potential when compared to ownership unbundling or biofuels. Energy security is perhaps the main subject to be treated by the Czechs that enjoys a higher profile, albeit mostly due to specific mishaps, such as gas disputes between Ukraine and Russia.


One substantive issue the Czechs must bring to an end is energy market liberalisation. The European Commission, in September 2007, issued a package of directives and regulations to open up European energy markets. In contrast to the position taken by the Council in first reading, where a third alternative for ownership unbundling (OU) and independent system operator (ISO) was supported, the European Parliament followed the proposal, contained in a report by Eluned Morgan (PES, UK) on the internal market in electricity, to propose only ownership unbundling. No second or third option for electricity was proposed, as was the case for gas.

Ownership unbundling would force electricity companies to sell their networks if they wished to continue in the generation business. MEPs clearly repeated Parliament's preference for ownership unbundling evident when adopting a report by Alejo Vidal-Quadras (EPP-ED, Spain) in July 2007. This is the fundamental difference that the Czechs will need to overcome in second reading with the Parliament before the end of March 2009.

The EP also followed rapporteur Giles Chichester (EPP-ED, UK) in adopting a stronger role for the proposed Agency for the Cooperation of Energy Regulators (ACER). MEPs thus rejected both the Commission and Council versions of a merely consultative energy agency based on comitology. They are also calling on the ACER to tackle cross-border issues between member states rather than being brought in as a last resort' as sought by the Council when dealing with the conditions for access to the network for cross-border exchanges in electricity.

The Czechs will no doubt use time pressure to push forward energy liberalisation measures. If the process is delayed further, the package runs...

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