EU turns up the heat on competition in the energy market  

By Troels Werner Christensen, 22. April 2009

The EU is now sharpening competition within the market for electricity and gas. Shortly before Easter the EU institutions reached agreement on a package of five directives and regulations. The package is designed to boost liberalisation and competition within the European energy market.

It entails a higher requirement for independence between system responsibility for grids and production and trading interests – in EU jargon called “unbundling”.

- Unfortunately the Member States are not ready for full unbundling of ownership, where each country’s system responsibility is completely independent of commercial interests – as we already have in Denmark, says Annette Schneider of the Danish Energy Association.

- But the EU is moving in the right direction, towards a pan-European energy market which in the longer term will guarantee security of supply and appropriate pricing.

The package also includes a certain harmonisation of retail market regulation – including rules for change of supplier, final billing, access to consumer data and intelligent electricity meters. The EU is also enhancing the powers of the regulatory authorities – in Denmark, the Danish Energy Regulatory Authority.

At the same time, the EU hopes to create better coordination between European-level regulators with a new agency called “ACER”.

A similar cooperative body for the institutions with system responsibility for transmission grids (“ENTSO-E” for electricity and “ENTSO-G” for gas) has the aim of strengthening European cooperation.

The package means greater transparency of price formation on the wholesale markets. From now on, the EU will be raising the requirements for publication of data. For example, transmission system operators will have to publish details of relevant consumption and projections, availability and use of production, grids and reserves.

The market players will also have to make relevant data available to the system operator. For example, owners of plant exceeding 250 MW will have to save five years of hourly data for each plant, including data on available production, reserves and trading exchange offers.

- The new rules will have no immediate consequences for Denmark, Schneider emphasises.

The EU institutions agreed the third liberalisation package on 23 March 2009. Formal adoption of the package in the Parliament and Council will take place during the spring. Subsequently the national governments have a limited period to implement the rules in their own national legislation.


Read more about the EU´s 3rd liberalization package
Liberalization package

Read about the Commissions initial proposal to the 3rd liberalization package (at the bottom on the page called "Legislative proposals")
Initial proposal


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