Implementation of different unbundling options in electricity and gas sectors of the CEE EU member states

Abstract

The article analyses implementation of the Third Energy Package in the Central and Eastern European countries, members of the EU. The main focus is given to different unbundling options applied for the transmission of electricity and gas: full ownership unbundling, an independent system operator or an independent transmission operator. A general analysis of the scientific literature of the different unbundling options has not revealed serious advantages of the full ownership unbundling option, preferred by the European Commission, in comparison with more simple and less costly option for establishing an independent transmission operator. In the CEE region the countries took different approaches in unbundling electricity and gas companies: if in electricity ownership unbundling was a rather popular approach, in the gas sector only Lithuania has taken the strongest option of unbundling. Existence of a single (or dominant) supplier which in many cases had some shares in the national companies did not allow Governments from the CEE region to choose a more stringent option. Ownership unbundling has significantly increased the gas prices for the consumers in Lithuania: first of all, Gazprom upset with such an inflexible behaviour of the Lithuanian Government left the country with the highest prices in the region, and, second, unbundling and creation of new companies coupled with the reduced demand increased transmission tariffs by 13% and distribution tariffs even up to 30%.