EU energy market opening fails to tame prices

LONDON – The European Union threw open another chunk of its energy market to full competition yesterday but climbing power prices and the dominance of big utilities are big concerns, consumers say.

Worries about security of power and gas supplies also dampened the mood as the EU completed the opening of its industrial energy market, giving thousands more businesses the right to switch supplier and shop around for better prices. A wave of consolidation in the five years since EU liberalisation started led to the creation of three mega-utilities – Germany’s E.ON and RWE and French state-run Electricite de France, all of which have investments from the UK to Eastern Europe.According to the European Commission, these three companies control 45 per cent of power generation within the EU.Brussels’ hopes of electricity flowing freely across borders within the 25-member bloc, stimulating competition and reducing the dominance of main suppliers, have been hampered by bottlenecks on cross-border cables.Liberalisation levels vary widely across the EU with many countries opening their markets ahead of the timetable set by Brussels while France has stuck rigidly to the minimum opening requirements.All households will be free to switch supplier in 2007.Dutch former gas monopoly Gasunie has lost about 30 per cent of its market share as new entrants muscle in.In contrast, Germany’s largest gas company Ruhrgas – owned by E.ON – said it signed only around 200 contracts allowing other companies to use its network.In the Netherlands, a survey by the federation of Dutch energy companies EnergieNed showed that just two per cent of the seven million gas and power consumers planned to switch supplier.-Nampa-ReutersA wave of consolidation in the five years since EU liberalisation started led to the creation of three mega-utilities – Germany’s E.ON and RWE and French state-run Electricite de France, all of which have investments from the UK to Eastern Europe.According to the European Commission, these three companies control 45 per cent of power generation within the EU.Brussels’ hopes of electricity flowing freely across borders within the 25-member bloc, stimulating competition and reducing the dominance of main suppliers, have been hampered by bottlenecks on cross-border cables.Liberalisation levels vary widely across the EU with many countries opening their markets ahead of the timetable set by Brussels while France has stuck rigidly to the minimum opening requirements.All households will be free to switch supplier in 2007.Dutch former gas monopoly Gasunie has lost about 30 per cent of its market share as new entrants muscle in.In contrast, Germany’s largest gas company Ruhrgas – owned by E.ON – said it signed only around 200 contracts allowing other companies to use its network.In the Netherlands, a survey by the federation of Dutch energy companies EnergieNed showed that just two per cent of the seven million gas and power consumers planned to switch supplier.-Nampa-Reuters