NMa: The Electricity Market Is Still A National Market

In assessing future concentrations in the electricity sector, for the time being the Netherlands Competition Authority (NMa) will continue to assume that the market is a national market. This appears from a consultation document published by NMa. The energy sector is highly dynamic and is in a transitional phase. The extent to which the energy markets in the various EU countries have been liberalised varies considerably. With regard to electricity, the price differences between the countries are considerable, as are the differences in the competitive conditions and cross-border transmission capacity. This situation is still expected to continue, certainly for a number of years. With regard to the supply of gas, the size of the market is at least national. An important area of attention with regard to gas is the fact that this is an important raw material in the production of electricity. Access to the supply of gas is therefore crucial for the proper functioning of the electricity market. In the event of a possible takeover of a gas company, this will be included in the assessment.

In assessing a concentration, attention will be given not only to the situation on the market at that moment, but an estimate will also be made of the developments on this market during the next few years. It is conceivable in this regard that NMa will agree to a company having a very strong position on a market for a short period, if it can be foreseen that this position will be of a very temporary nature due to undisputed developments.

In NMa's opinion, if the electricity market is to be regarded as a market which is broader than the national or even the European market, it is necessary, in any event, that a number of the following conditions are met:

• the simultaneous opening of the market in the various EU countries
• the harmonisation of the regulation of the energy sector and regulated access to the networks
• a separation between the management of the network and other activities
• the harmonisation of environmental requirements, subsidies and taxation
• a coherent system of tariffs for cross-border transactions and the allocation of transmission capacity
• increasing the interconnection capacity and import opportunities in countries other than the Netherlands
• transparent information for market players and regulators.

Of course, in the case of a specific notification of a concentration, the market situation at that moment will be assessed, taking into account these elements, amongst others.

NMa has drawn these conclusions after a survey amongst a large number of market players. The most important findings have been presented in a consultation document, which reflects NMa's insights, as a starting point for the assessment of future concentrations in the energy sector. This is the first description of a sector which NMa has published in the area of concentration regulation. After a consultation period of two months, final conclusions will be drawn. Due to the dynamism of the energy sector, these principles will only apply for a limited period.