E.ON Has Freed Up German Market: EC

The European Commission (EC) has released German energy firm E.ON from commitments to reduce its long-term bookings on the German gas grid almost five years ahead of schedule, because the firm has implemented the commitments so well that market competition has “increased significantly”.

E.ON used to book most of Germany’s available gas transmission capacity, prompting the EC to conclude this was preventing other gas suppliers from accessing that market and to apply pressure on E.ON to undertake market-opening measures. In May 2010 the EC accepted commitments from E.ON to reduce its pipeline capacity bookings and to further reduce such bookings out to April 2021.

On July 26, the EC said that E.ON has actually booked significantly less German pipeline capacity than the threshold of 54% of total capacity set out in the 2010 commitments.  It added that it had recently re-assessed the market situation at E.ON’s request and concluded that, due to this material change in the structure of German gas market, the commitments were no longer necessary.

E.ON is believed to have made the request in preparation for the full separation of its fossil-fuel supply and trading subsidiary Uniper this September, so that neither company carries archaic obligations. EU competition commissioner Margrethe Vestager said: “The commitments have resolved the competition problem even quicker than expected and are no longer needed now."

Uniper logo (Source: Uniper)

A week ago E.ON said that no shareholders had challenged its plan to demerge Uniper and that its listing of Uniper this September remains on course.

Mark Smedley