The liberalisation of internal energy market in the EU

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					The liberalisation of internal energy market in the EU
Peter Ševce | 08.02.2008

In September 2007, the European Commission introduced the third package of
legislative proposals aimed at the EU internal energy market and his further
liberalisation. In the centre of the Commission's attention are primarily wider
possibility for the consumer to choose a supplier, fairer prices, environment-friendly
energy production and the security of supplies.

The reason for the introduction of new proposals is the Commission's statement that
the absence of internal market is caused by market fragmentation along national
borders, a high degree of vertical integration as well as market concentration. (1)

The historical background of the proposals

The Commission's endeavour to establish a single market dates back to 1996 when
the first directive on joint rules for internal market with electrical energy (96/92/EC)
was adopted. This directive was followed by the directive on earth gas in 1998
(98/30/EC). In both cases it was required that the owners of network assets created
separate accounts which would have covered activities connected with the "network
business” and thus earmarked all other activities as wholesale and retail. Since the
Commission came to the conclusion that these steps were insufficient for the
establishment of a functional market with electricity and gas, the revision of directives
and the co-called second energy package was under way in 2003. That required that
network activities were earmarked into an independent company, although this could

have been owned by a mother company handling wholesale and retail. Like the
majority of political documents adopted by the EU authorities, also both energy
packages were the result of compromises. In the course of the transposition of
directives to individual national legislatives, a shift in the accent was under way and
each country applied general standards in accordance with its habits. The result of
this process was the existence of individual more or less "national” markets with
limited competition and not a single European market. (2)

European Commission's objections to the persistent development

It was not earlier than January 2007 that the Commission released an assessment
report in which it identified the main problem areas of European power engineering
which even the second package of proposals failed to deal with. According to the
assessment the major drawback was the fact that established gas and electricity
companies maintained to a large extent a dominant position on "their” national
markets. (3) For the first time two sentences appeared in the report that
characterised the Commission's stance on the separation of network operation from
production and distribution.

In the case of earth gas the lack of liquidity and a restricted access to infrastructure,
which limit new suppliers as for the provision of services, have proved to be further
obstacles to the establishment of a single market. Also long-term contracts signed
between mining companies and consumers are criticised. The gas infrastructure
(pipelines and storage tanks) is predominantly owned by a consumer company and
an insufficient separation of this infrastructure from gas supplies results in an

insufficient market opening. The drawbacks mentioned appear despite ordinances on
third parties (TPA – third party access) and legal unbundling.

As regards electric energy the central Commission's objections pertain to the vertical
production integration, supplies and network activities in the hands of a single
dominant company, unsatisfactory cooperation among distribution network operators,
inconsistent rules in terms of electricity market and network access, information
deficiency and market transparency.

The Commission strives to ensure by means of the new package of proposals that
the countries' energy market becomes open for consumers from other countries and
domestic companies equally. According to optimistic assumptions of the Commission
the consumers could chose suppliers on the basis of personal preferences, i.e. they
could decide whether to give preference to green energy or better customer service,
or the price is the primary motivation. The objective isn't to secure gas and electric
energy supplies on the basis of trust, but in accordance with real market conditions.
According to the Commission the insufficient legal unbundling is perceptible in three
areas, namely the discrimination within the third party access principle, unsatisfactory
access to information for new interested subjects and distorted investment
environment. The third package of proposals is composed of three ordinances and
two directives. The updates of the 2003/54/EC (4) and 2003/55/EC (5) directives on
electrical energy represent the biggest changes within the development.

The existent lawful claims concerning legal and functional separation of network
administration from production and supplies were carried out in individual states by

one of two methods. The first one was the establishment of an independent company
which ran the existent network. The second one was the earmarking of network
assets into the division in terms of the existent and integrated company. The second
principle, however, caused troubles, because there was a growing concern that there
wouldn't be the guaranteed undiscriminating third party access to the networks, but a
preferred own legally separated division. The impossibility to secure undiscriminating
access to information for third companies as well as the question of the networks'
investment needs also became a problem, because a vertically integrated company
was not interested in investing on the condition that it would have helped third parties
in this way. According to the Commission's findings integrated companies invested in
networks and new connecting pipes lower means than completely separated
companies contributing thus to the safety of supplies. (5)

The Commission mentions in the draft directives also national regulators that, if they
are strong enough, are the guarantee for a well functioning market. The regulators'
positions vary according to country. In some countries, they were established only a
short time ago.

Proposals encompassed in the directives of the third energy package

Proposals offered in the third package can be summarised in several points:

- The ownership separation of production and distribution from distribution network
(ownership unbundling): The network ownership and its operation must be separated.
It means that the operation of the electrical and gas distribution network must be

separated from the activities in the field of production and supplying. From the
proposals clearly emerges that the Commission prefers in this regard the alternative
of separated ownership, in other words, the same enterprise won't be able to own the
distribution network and to deal concurrently with production or energy supplying any
longer. The advantage of such separation should be the loss of suspicion that the
network operator will give preference to a concrete supplier.

- The Commission also suggests an "Independent System Operator” (ISO) as a
second alternative which will enable the existent vertically interconnected enterprises
to retain the network ownership, however, on the condition that the assets will be run
in practice by a fully independent enterprise or subject. Both alternatives in question
will give a fresh impetus for companies to invest in new infrastructure, interconnection
capacities and new production capacity. Thus electric power cuts and useless
fluctuations in prices will be prevented. This measure pertains to electric power as
well as gas. Meanwhile, greater progress in ownership separation has been achieved
in the electric power sector.

- Within the EU the Commission proposes that any company producing or distributing
electric power or gas in some member state cannot possess a network operator in
any other state. The same conditions are supposed to hold for domestic firms as well
as companies outside the EU which want to put capital interest into network
operators. This means that they have to meet equal requirements for the separation
of production and supplying from distribution network. The Commission asks in the
proposal that a contract is to be signed between the EU and the country from which
the potential capital comes. This should ensure that the company abides by the

principles of the entry of network operators like companies from member states do.
This clause has been criticised particularly by the Russian giant Gazprom.

- The Commission suggests to reinforce state regulatory bodies the status of which is
crucial due to the specificity of dealing in electric power and gas. National regulators
primarily have to secure undiscriminating approach and must have access to
important decisions too. The key principle is obviously their independence of main
entrepreneurial subjects as well as the government.

- The Commission also proposes the establishment of an agency coordinating
national regulatory authorities that should be in charge of cross-border trading in
electric power and gas. The Agency is supposed to conduct a framework for the
collaboration among national regulators and supervise the mutual cooperation
among network operators as well.

- The Commission puts forward concrete steps in quest for an efficient collaboration
between    individual   network    operators.   According   to   the   Commission   the
strengthened collaboration would by easier if they were proprietary separated,
because they wouldn't pose a competition to each other. Although the Association of
Distribution Network Administrators is to be formal, but also voluntary in contrast to
the agency for regulators. Similar associations exist already. (ETSO, UCTE,

- Further Commission's proposals are the support of cross-border cooperation, higher
transparency and solidarity. (7)

New measures included in the third package are supposed to enhance the security of
supplies predominantly through the establishment of security and emergency
standards. In this way primarily electric power supplies will be secured and blackouts
will be prevented, because this commodity "travels” faster than gas.

One of the important tools for the safeguard of liberalised internal market is the
sufficiently strong and independent activity of national regulatory bodies. Power
engineering is in this case specific, because from the historical point of view national
monopolies were established the position of which the market itself wasn't capable of
enfeebling. That's why the significance of regulators has been growing and specific
conditions for their work have been set. Since it isn't economically bearable to create
alternative networks for gas and electric power supplies, the regulator has to ensure
an effective and undiscriminating access to distribution networks for third companies.
The new package proposes the strengthening of regulators by allowing them to issue
binding decisions for companies, to undertake necessary steps in the case of
insufficient functioning of gas and electricity markets and to fine companies which
don't fulfil regulator's ordinances.

The negotiations about international affairs, this holds true primarily for cross-border
trade, will be handled by the new Agency for the Cooperation of Energy Regulators.
As interconnections with enough capacity among individual countries are necessary
for the establishment of a functioning market, this problem will be dealt with by the
agency as the pivotal one. (8) The main condition for the origin of a single energy
market is the sufficient capacity of cross-border interconnections and it is the
deficiency of them which causes that the final consumers don't derive such benefits
like originally supposed.

The situation in Slovak energy sector

In Slovakia, a new market for companies was created on 1st January, 2005.
Households have had this authority according to the directive 2003/54/ES since 1st
July, 2007. Despite the formally declared market openness, the competitive
environment hasn't spread enough. The obstacle is, like it is the case also within
other EU states, the dominance of established companies. Market openness is
greater in the case of electrical power rather than gas. Slovenské Elektrárne (SE,
joint-stock company) are the main producer with a market share approaching 84 per
cent. (9)

The operator of electrical power distribution network (Slovenská elektrizačná
prenosová sústava joint-stock company, – SEPS, joint-stock company) is from the
proprietary viewpoint separated form the major producer and distribution companies,
although not completely. The problem is that the owner of the distribution network is
the state which has simultaneously a share in distribution companies as well as in SE
joint-stock company as the primary electricity producer. (10) (11)

Graph No. 1

Ownership structure of the producer of electricity, transmission system and

There are three big distribution companies in Slovakia (Západoslovenská energetika
joint-stock    company,    Stredoslovenská      energetika    joint-stock   company
and Východoslovenská energetika joint-stock company) which have divided the
country geographically. Since they don't possess production capacity, they are
dependent on the main supplier with whom they sign annual contracts. In Slovakia,
there isn't a developed functional and liquid electric power wholesale, because most
of the distribution companies' capacity isn't conditioned by a contract with Slovenské
elektrárne joint-stock company. It will be intriguing to monitor how the projects,
according to which several new power plants are supposed to be built, will get on,
however, not under the umbrella of SE joint-stock company. It is mostly gas fired

power plants the building of which is planned in the area of the companies Slovnaft,
U.S. Steel Košice and near Lučenec in the village of Panické Dravce.

Recently, there has been a competitive fight under way which is aimed particularly at
industrial enterprises and companies that are financially more interesting than
households. Other 18 companies were granted supplying licences. Among them is
also the Czech ČEZ in the long-term development strategy of which is the foreign
electric power market entry. Notwithstanding the market openness, there were just a
few minor changes of electric power suppliers (approximately 1 per cent). (12)
Limiting factor for the entry of alternative suppliers are the high fees for system
services which solely Slovenské elektrárne are able to manage. It is this absence of
competition which is the striking difference in comparison to, for instance, the Czech

Potential for the entry of new suppliers represents the growth of the demand for
electric power on domestic market which will be accompanied by the shut-down of
production capacity. (13) The largest lack of electricity is expected in the period from
2009 to 2012. The demand will have to be compensated by supplies from abroad,
Ukraine looks as the most probable option. In this context it will be necessary to build
an unconventional one-way electricity main in the territory of the Slovak Republic. A
framework agreement on electric power supplies was signed by the Slovak PM
Robert Fico and the Ukrainian PM Viktor Yanukovych in the end of August 2007.

Typical of the gas branch is the high dependence on a single external source of
supplies and the dominance of primarily state-owned vertically integrated company
SPP joint-stock company. In this field Slovakia is a strange phenomenon since there
are only few countries which cover almost the entire consumption of oil, earth gas

and uranium by supplies from a single country. The operator of gas distribution
system was detached from the legal point of view in June 2006 – SPP Transport
joint-stock company the name of which has changed for eustream joint-stock
company since January 2008.

SPP is responsible for the whole of gas distributed in the Slovak territory and is at the
same time the owner of distribution networks. In spite of the fact that there has been
a legal detachment of the networks and the facilitation of entry for other suppliers as
well, nothing has been put to practice so far and the Office for the Regulation of
Network Branches (ÚRSO) hasn't registered any claim yet.

There is a potential for new earth gas suppliers in Slovakia. The advantage is the
proximity of the distribution centre in Baumgarten where three Slovak companies
have been already registered. From among those Nafta joint-stock company belongs
to active members. (14) Those companies, which take gas flowing across the Slovak
Republic, could utilise a part of it for the supplying of Slovak consumers. Similarly to
electric power, also in this field wholesale consumers are more interesting than

Objections against the Commission's proposals

Objections against the proposed measures of the third energy package come from
energy concerns in the EU, individual member states as well as Gazprom which took
some of its articles personally.
Energy companies pay attention particularly to two things included in the discussion
about what's better – ownership unbundling or independent operator. They were the
impetus why the Commission refrained from its uncompromising stance on

ownership separation as the only option. Nowadays, discussion about both proposals
is held. The main objective is that the proprietary separation of network operators will
enfeeble the position of vertically integrated concerns in the course of negotiations
with mining companies which needn't fulfil this condition (they only have to if they
want to acquire network assets). The separation of ownership from its administration
would actually mean expropriation leading to price increase mainly of gas for final
consumers. However, there would be no real competition, because rival companies
would buy gas from the same supplier.

Energy companies also complain about the fact that the second energy package
hasn't been wholly implemented yet and another one already follows. The
Commission doesn't even consider the differences between earth gas and electricity.
Gas has to face perpetual competition of other fuels and is imported from third
countries. Electricity is produced directly in member states and not always from
sources necessarily imported from abroad. Electricity as well as gas is traded though
under similar but certainly different terms and conditions. From this point of view their
integration into a single proposal is unfortunate, because not all the countries share
the opinion on these commodities. In practice it mostly looks as following: the
countries agree with the separation of distribution systems as for electric power,
however, reject this with regard to earth gas supplies.

The worst critic of the part of the proposal, according to which the conditions valid for
European companies should apply also to foreign companies, is Russian Gazprom.
According to the company the Commission tries in this way to protect the internal
market against the entry of new subjects which is in conflict with the declared market
openness. The Russian giant has been interested in a capital entry into the largest
British distribution company Centrica since 2006. However, the British Government

has prevented this right owing to the endangerment of domestic energy security.
From historical perspective the Commission's requirement represents just an another
form of proposals granting access of third parties to Gazprom's networks which have
been presented in the Energy Charter for many years. Anyway, Russian side hasn't
ratified it until now, because Gazprom would thus lose its monopoly on earth gas
distribution in the country.

The commission justifies the ownership separation by the growth of investments that
are prerequisite for sufficiently flexible interconnections. According to the Director
General for Economic Competition Philip Lowe investments in infrastructure looked
as following after ownership unbundling in Great Britain (15) (16):

Chart No. 1
Change of investment levels in the ownership unbundled British Gas Group

However, the figures presented above aren't explained. It's not clear what the
finances were spent on. The factual investment growth is questioned concurrently.

According to the SPP Chairman of the Board of Chairs the investments decreased by
25 per cent. (17)

In the Commission's reports predominantly the cut of network fees and high
investment level after ownership unbundling are highlighted on the example of Great
Britain. This viewpoint is unilateral, because as the example serves a country with the
most developed gas industry where regulation is different from other EU countries,
competition is created by several suppliers and there are LNG supplies which make
the market more resistant. The Commission's proposals don't take into account
national peculiarities of the EU countries and therefore the current discussion about
their final shape is needed.

Energy companies argue that there is no direct connection between ownership
unbundling and the development of free and undiscriminating third party access to
networks. According to SPP countries with legal unbundling and sufficiently strong
regulation framework have comparable results as for the number of consumers which
changed the supplier with countries where separated ownership exists. (18) From
this point of view the improvement of the current condition would do. An analysis by
the consulting company A.T. Kearney has come to similar conclusions. (19)
According to the company it isn't to be proved empirically that ownership separation
leads to a more extensive competition. There is also no relation between the form of
unbundling and prices, network tariffs, investment activities and network reliability.
According to the analysis differences in the degree of competition on individual
markets hinge rather on long-term experience with regulation than on how forcefully
regulation and legal separation are pushed through.

According to the Head of the Regulation Council ÚRSO Jozef Holjenčík ownership

unbundling in Slovakia, which was partially realised on 1st January 2007 with the aim
of separating distribution from other activities, caused the increase of prices for final
consumer. (20) Among the possible impacts of unbundling are the pressure on price
growth, the increase of administrative burden, the drop of management efficiency in
the aftermath of ownership multitude and problems with the reconciliation of new
subjects' strategic objectives. However, we have these experiences with electric
power only.

In Europe, Hungary and Italy try to put into practice the alternative proposal of the
Commission on the utilisation of an independent system operator (ISO). Nonetheless,
both countries refrained from this concept after the vain pursuit of an arrangement
which would motivate property owners as well as their administrators to close
collaboration in terms of all areas. It's a forceful symbiosis of two foreign companies
with primarily different motivation. (21) Shortages appeared mainly in decision-
making processes towards third parties but also in network administration. There was
a conflict of competences and indifferent communication with regulatory and state

In its proposals the Commission focuses particularly on the high integration of
distribution network with wholesale/retail and ignores the really high interconnection
between wholesale and retail. (22) This point is the subject of criticism too, because it
is the interconnection of production and distribution to consumers which will render
the market open despite free access to networks. (23) If a retailer is proprietary linked
with wholesaler, there is a risk that it will be preferred as a supplier. In such a case it
doesn't matter who will transit gas or electricity. That's why it is momentous to
concentrate also on the conditions of distribution and uphold the liberalisation of
these areas too.

Graph No.2
Connection between the retail and wholesale

The Commission justifies its proposals also by means of the fall of gas transport fees,
anyway, it doesn't differentiate between transit and distribution in the context of
unbundling. From the viewpoint of state-wide importance transit is more crucial and
strategic. The costs of it, however, are lower and the transport accounts for only 3.3
per cent of the overall price for consumers. Distribution system is vital for final
consumers. Nevertheless, local blackouts don't have a state-wide impact. Therefore
the proposed energy package won't most probably be the last one and the
Commission will strive to achieve a distribution liberalisation if this won't be achieved
thank to the work of regulators. Conceivable is also such a scenario according to
which the third package would be attached to another one dealing with retail as well.
Its efficiency will be thus delayed by several years. (25)

The question remains to what extent the changes proposed by the Commission are
feasible. In all areas it is crucial to step up the Europe-wide collaboration and

coordination, because on a single market, issues are common and malfunctions in
one part of Europe are automatically carried into other parts. Simultaneously, the
reinforcement of cooperation requires a certain form of centralisation and the loss of
competences of national authorities. This is unacceptable predominantly for large EU

The position of the Slovak Republic

The consequence of these objections is the negative attitude of Slovakia to current
Commission's effort. (26) Slovakia supported the letter addressed to the European
Commission by the French Economy Minister Jean-Louis Borloo and signed yet by
the representatives of Austria, Germany, Greece, Bulgaria, Cyprus, Latvia and
Luxemburg. (27) This attitude may be the result of the discussion about the future of
Slovak power engineering which was commenced in 2007. It might be at the same
time affected by the position of German and French companies which participated in
the privatisation of distribution companies (EdF, E.On, RWE, GgF) and SPP (E.On,
Ruhrgas, GdF).

Slovakia rejects ownership separation within gas industry, but it doesn't support an
independent operator too. The main objection against the ownership separation
proposal as well as independent operator (ISO) is the breaching of ownership rights.
ISO is therefore not considered a fully adequate alternative to ownership unbundling.

Unsatisfied countries are supposed to introduce their own third proposal at the
beginning of 2008. According to some statements it will be the so-called "regulated

unbundling”, however, details concerning its difference form existent proposals are

Market liberalisation achieved via ownership separation or regulation ordinances will
help to increase competition on individual markets. Nonetheless, further condition is
the development of cross-border transport capacities. As for electric power transport,
Slovakia needs to step up the capacity towards Hungary and to build a new
connection to Austria and Poland. For the possible import of electric power from
Ukraine it is necessary to construct a new main which will meet technical standards
for its import. In terms of cross-border affairs Slovak Regulatory Authority lacks
competences in accordance with valid legislation. For earth gas supplies it is needed
to raise the capacity of the connection with Austrian Baumgarten from which new
suppliers can import the raw material. Meanwhile, its price is higher than that one of
Russian gas in this distribution point, however, the differences are going to shrink
owing to the expected growth in the future.

At present, a discussion is held that has been joined by all relevant parties and the
result of which should be the choice of the most suitable scenario for Slovak energy
sector. If it comes to the establishment of independent system operators which would
remain in the ownership of energy concerns dealing in production or distribution, or if
the pushing through of legal unbundling was thorough, more emphasis would be laid
on regulatory bodies as well as their competences and the strongest effect possible
would be reached in this way. Regulatory body has to create favourable conditions
for the entry of new suppliers of earth gas as well as electric power. In this context
the most crucial thing is its independence and orientation towards maximum benefits
for final consumers. The separation of electric power distribution network ownership
exists already in Slovakia. More questionable is earth gas which will be the subject of
main debate. The attention must be paid also to further steps which will follow. A
discussion coping with the future of retail segment and its optimum structure must be
held. In this case it would be better to separate the proposals on gas and those on
electric power in order to avoid misunderstandings.

Slovenia, which took the EU presidency in January 2008, said that it would pay
thorough attention to power engineering issues. It would strive to acquire new
proposals from countries not content with current Commission's concept. France, i.e.
the country which is against the ownership separation, will take over the EU
presidency after Slovenia. There is a threat that during Slovenian presidency the
process will be delayed and in the course of French one the proposals will be rather
curtailed so that they are acceptable for the majority of countries. If this is the case
then the idea behind as well as the desirable effect will be lost or even worse, the
coordinated process of the establishment of a single market might be terminated,
because the coordination will be achieved somehow, or rather, no matter how.

The acquisition of more gas suppliers must follow as a supplement to internal
liberalised market. However, this is restricted by the geographical distribution of
resources. Nowadays, there is just a single region in the EU's range which doesn't
supply it with gas, namely the region of the Caspian Sea and Iran. This should
change through the construction of the Nabucco gas pipeline. The expansion of trade
in liquefied gas LNG, for which it is necessary to build enough terminals, follows.
Four suppliers (Norway, North Africa countries, Russia and the Caspian region) and
developed LNG supplies stand for the optimum supplier mix under the current
circumstances for the EU.

Slovakia has to step up its activity in order to participate in such projects like
Nabucco. Since mostly private companies are in the consortium, one of few
possibilities seems to be the political support through the joint attitude of the EU
which should have the form of financial guarantees of the project. Power engineering
isn't a sector which is based exclusively on economic principles. One has to be
aware of the fact that the security of supplies is a financially demanding task. Among
the prerequisites is also the coordination of all units of state administration which see
to security and raw material supplies, i.e. the Defence Ministry, the Economy Ministry
and the Foreign Affairs Ministry.

Submitted proposals like those concerning liberalisation and diversification represent
solutions for the next 15 to 30 years. A long-term solution is the utilisation of
renewable resources to maximum but at the same time efficient extent as well as the
identification of the most suitable resources for individual countries. In the future,
there will be a transition form the utilisation of current external energy supplies to the
utilisation of local sources for whose Slovakia has enormous potential.



   2)    Šolc, P.: 3. energetický balíček Evropské komise z pohledu provozovatele
        přenosové soustavy, pro-energy magazín,, 2007




     sk01.pdf, s. 5.



     country_reviews_en.pdf, s. 147.

10) Podiely štátu: SE, a.s. – 34 %, ZSE, a.s. – 51 %, SSE, a.s. – 51 %, VSE, a.s.
     – 51 %.

11) Similar problem is being solved also in the Czech Republic. According to their
     proposals the ownership separation will be considered accomplished on the
     condition that ČEPS (the owner of the distribution network) and ČEZ comes
     under different ministries and their managing structures are modified (one
     ministry cannot be represented in managing bodies of both companies).

      Hüner, T.: Energetická politika EU a třetí legislativní balíček, pro-energy
      magazin,, 2007.


13) Average annual electricity consumption growth is expected to be between 0.8
      and 2.3 per cent in the period till 2030. Within the reference scenario with an
      average annual growth amounting to 1.6 per cent it represents in comparison
      to the year 2006 an increase by 13.5 TWh. That is nearly a 46 per cent growth
      in comparison to current electricity consumption. From a long-term perspective
      up to 2030 in view of the expected electricity consumption growth and the
      shutdown of existent production capacities, for Slovakia it will be necessary to
      secure around 6600 MW of new power output in order to cover the expected
      production deficiency accounting for approximately 29 TWh. Source: Návrh
      stratégie energetickej bezpečnosti SR., page. 84.


15) Lowe, P, Pucinskaite, I, Webster, W & Lindberg, P (2007): 'Effective
      unbundling of energy transmission networks: lessons from the Energy Sector
      Inquiry' Competition Policy Newsletter, no 1, Spring 2007, s. 147.

16) Among cases, by means of which the unbundling processes are justified, the
      description of gas market in the United Kingdom appears in particular. In the
      country, this process has begun in 1997 when the distribution division of

      British Gas, an integrated company privatised in 1987, became a part of the
      company Centrica, which has remained the largest distribution company until
      now. In 2000, the gas network division became a part of the company Lattice,
      which merged with the electric distribution system creating the company
      National Grid Transco in 2002. In 2005, the British distribution network was
      divided into eight regions four of which were sold at the suggestion of the
      regulatory body. That's why we can speak of ownership unbundling of network
      assets yet after 2000.




20), s. 24.

21) Šolc, P.: 3. energetický balíček Evropské komise z pohledu provozovatele
      přenosové soustavy. Pro-Energy magazín,, 2007

22) Thomas, S.: A critique of the European Commission's evidence of the need
      for   ownership      unbundling     of   energy     networks,    July   2007, 09-E-Lowecritique.doc, s. 4.

23) This is the situation in the Czech Republic where the major electric power
      producer is the company ČEZ which supplies energy to the majority of
      consumers through its daughter distribution companies.

24), s. 14.

25) In accordance with the estimates the proposals may take effect in 2010.
      However, they will have to be adopted by the Council of Ministers and the
      European Parliament.

26) Power engineering: Six countries have been protesting against the reform
      proposed       by       the       Commission.,     01.08.2007.

27)     There will be yet an animated discussion on energy liberalisation,,        28.11.2007.