Table of contents

This section addresses the issue whether the 2004 enlargement has caused any disruption in the functioning of the EU Internal Energy Market (IEM). The effects of and the solutions adopted for any such disruptions are also considered.

The 2004 expansion of the European Union to 10 new countries has altered both the energy markets and participating companies in these new Member States. Discussed in this chapter is how the 2004 EU enlargement has impacted both countries and companies in the EU. A dual approach is taken that examines both the gas and electricity companies affected by the enlargement. The focus is mainly on the impact that enlargement has had on new Member States.

This chapter will show that there are energy pricing and demand differentials between the EU-15 and EU-10. The price of gas has gone through a period of dramatic price rises in all current EU Member States. Markedly, since 2000 the price of gas for customers in Hungary, the Czech Republic and Slovakia has risen significantly as these countries make the transition to more market orientated pricing structures. In terms of supply, delivery and distribution E.ON Ruhrgas, Gazprom and to an extent RWE, have emerged as significant owners in all new Member States excluding Cyprus, Malta and Poland. E.On, RWE and EDF have also been active in the fi eld of electricity generation and distribution in the Czech Republic, Hungary and Slovakia.

This chapter aims at providing answers to the following questions:

• To what extent are the new Member States complying with their obligations in the field of renewable energy sources?
• Has the 2004 enlargement led to an increase in (public and private) investment in renewable energy sources?
• Have the new regulatory framework and investments resulted in an increased share of renewable energy sources in the energy balance?

The questions to be asked in this chapter are: What has been the impact of the Accession process in the field of energy efficiency? Are the economies of the New Member States (NMSs) less energy intensive and what have been the drivers behind decline in energy intensities? Are NMSs enforcing EU directives in spirit and not only on paper? Three years after Accession its impacts should be identifiable and should serve to draw important lessons. This includes the actual effectiveness of the enlargement processes in the field of energy efficiency and improvements for the future enlargement processes. The present chapter evaluates the impact of the 2004 Enlargement in the field of energy efficiency by looking at the following issues:

• Have the regulatory framework and investments resulted in a reduced energy intensity of the economies of the new Member States?
• To what extent the New Member States (NMS) are complying with their obligations in the field of the promotion of energy efficiency?

The Energy Acquis Communautaire identifies the body of common rights and obligations in the area of energy which is binding for all the Member States of the EU. This broad definition includes rules and policies on:

• Competition;
• State aid (including support to the coal sector);
• The internal energy market (including liberalisation and the development of competition in the electricity and gas markets);
• Promotion of renewable energy;
• Energy efficiency; and
• Security of supply.

Since issues related to the promotion of renewable energy, energy efficiency and security of supply are covered in other parts of this study, the analysis here focuses on the regulatory framework with respect to the provisions contained in EC Directives 2003/54/EC, 2003/55/EC and Regulations 1228/2003 and 1775/2005. This chapter also assesses the administrative capacity of the national energy regulatory agencies.