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Competition Policy

Sector inquiry into energy (2005)

Overview

Pursuant to Article 17 of Regulation 1/2003 EC, in 2005, the European Commission launched an inquiry into competition in gas and electricity market. In its Communication of 2 February 2005 to the Spring European Council "Working together for growth and jobs, a new start for the Lisbon strategy", (COM(2005) 24 final)) the Commission set out a more pro-active application of competition policy, in particular, by means of sectoral screenings for barriers to competition in the energy sector.

The energy inquiry responded to concerns voiced by consumers and new entrants in the sector about the development of wholesale gas and electricity markets and limited choice for consumers. Read more about sector inquiries.

The final report, published in January 2007, identified serious shortcomings in the electricity and gas markets:

  • too much market concentration in most national markets;
  • a lack of liquidity, preventing successful new entry;
  • too little integration between Member States’ markets;
  • an absence of transparently available market information, leading to distrust in the pricing mechanisms
  • an inadequate current level of unbundling between network and supply interests which has negative repercussions on market functioning and investment incentives;
  • customers being tied to suppliers through long-term downstream contracts;
  • current balancing markets and small balancing zones which favour incumbents.

Follow-up to the sector inquiry

To tackle the problems identified in the course of the inquiry, the Commission is pursuing individual cases under competition rules (anti-trust, merger control and state aids) and has taken further action to improve the regulatory framework for energy liberalisation:

Final report

10 January 2007

The Final Report of the inquiry was adopted together with proposals for a comprehensive package of measures to establish a new Energy Policy for Europe to combat climate change and boost the EU's energy security and competitiveness.

Study "Structure and performance of six wholesale electricity markets in 2003, 2004 and 2005"

Speeches

Preliminary report (16 February 2006)

Public presentation of the preliminary findings of the energy sector inquiry on 16 February 2006

Public consultation on the preliminary report

The Commission received several comments on the Preliminary report of the Energy Sector Inquiry from interested parties in response to the Public Consultation which was closed on 1 May 2006.