UK presses France to open electricity market

THE GOVERNMENT yesterday stepped up the pressure on the French to open their electricity market to competition from UK suppliers.

Speaking as the first phase of electricity liberalisation began across Europe, the energy minister, John Battle, urged the European Commission to get tough on states that lagged behind. The Electricity Association, the UK trade body, accused some member states of "stalling".

One of the Government's priorities will be an overhaul of the way the interconnector between Britain and France operates. Ministers are angry that the current contract between Electricite de France and National Grid guarantees that power only flows in one direction. Last year EdF, a state-owned monopoly, supplied nearly 6 per cent of the electricity market in England and Wales through the 2,000 megawatt interconnector.

Although the contract only expires in 2002, Mr Battle is keen that talks begin soon on a new agreement that provides UK generators with more access to the interconnector.

The Government could have made this a prerequisite of allowing EdF's pounds 1.9bn takeover of London Electricity. But the European Commission refused to hand authority for vetting the merger back to London, a rebuff ministers still smart over.

From today EU states are required to open up just over a quarter of their electricity markets to competition, allowing large industrial users freedom to shop around. By 2003 at least a third of Europe's electricity markets should be opened up.

But the EU legislation leaves much to the interpretation of national governments, leading to accusations that some member states are stalling. In France, for instance, the legislation needed to enact the EU directive is still bogged down in the National Assembly.

Mr Battle said some states were going further than required. "However, some countries lag behind, and I expect the European Commission to ensure that member states comply with the basic requirements of the directive."

Electricity Association chief executive Philip Daubeney said: "It is important that the reciprocity principle is enforced to prevent companies competing in neighbouring markets while remaining de facto monopolies at home."