Christian von Weizsäcker proposes alternative to EU energy unbundling
The European Commission has proposed that integrated energy companies that operate production, network and retail businesses should be forced to divest of the energy transmission assets. The Commission signalled that it would also be prepared to consider the so called Independent System Operator (ISO) model. Under this model, each integrated energy company would retain ownership of their respective networks but place the management of the assets with an independent system operator.
In an article in the Munich based "Süddeutsche Zeitung" Christian von Weizsäcker has outlined an alternative, the Regional System Operator (RSO) model. Under this model multiple owners of transmission assets - be they vertically integrated or stand-alone network companies - would place their assets with a joint (multinational) independent system operator. Joint operations could for example extend to investment planning and harmonisation of market rules with the aim of fostering stronger European market integration. Christian von Weizsäcker points out that the model proposed by the EU would not be able to achieve the same benefits as it focuses on national operators rather than on the challenge of market integration.
C. Christian von Weizsäcker is an Associate at the Max-Planck-Institute in Bonn, member of the academic advisory board to the German Federal Minstry of Economics and a Senior Associate of Frontier Economics. He is also the former chairman of the German Monopoly Commission. Frontier (London and Cologne) has advised stakeholders in the UK, Ireland and other European countries on system operator models in the energy industry, and is currently working on network unbundling issues with a number of companies.
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