EU ministers reach accord

THE introduction of competition in the EU electricity market was finally agreed by energy ministers meeting in Luxembourg yesterday.

Under the agreement, 22 per cent of the market will be opened to competition from January 1998. This will provide time for the ESB to complete its restructuring process and adjust to the new competitive market, said the Minister for Energy, Mr Lowry.

The percentage of the market which is to be opened to competition will rise to 32 per cent in the six years after 1998. This is much in line with the outcome expected by the ESB and the Irish Business and Employers Confederation.

The timetable and extent of the competition agreed "represents a reasonable balance between the wishes of those member states who want immediate, full liberalisation and those, like Ireland, who wish to approach the restructuring of this vital industry in a more prudent and planned way Mr Lowry said.

The meeting lasted almost 10 hours and brought to a successful conclusion an eight year effort to open the EU's energy market.

Provisions to accommodate the public service commitments of electricity companies and the use of indigenous fuels in electricity production, while they came under attack during the meeting, have been agreed.

The public service commitments provision prevents the "cherry picking" of lucrative customers at the expense of the domestic consumer and consumers in less densely populated areas.

The indigenous fuels agreement will protect the 2,000 jobs involved in the use of milled peat in energy production by the ESB.

"We are putting in place here the necessary framework for the ESB to operate successfully in a competitive market," Mr Lowry said. "The consumer will certainly be the winner in such a market."

The effort to agree on the introduction of competition into the EU energy market began eight years ago. The project was given a fresh lease of life this month when Germany and France narrowed their differences.

Mr Lowry said it was particularly satisfying that the agreement on opening the market was, albeit with some considerable difficulty, arrived at by means of of the political process rather than by a decision of the European Court or by unilateral action of the Commission.