Commissioner vows to open up energy market
LONDON – Europe’s Competition Commissioner yesterday warned utilities that Brussels is ready to get tough in its quest to kick-start competition in the bloc’s energy market. Neelie Kroes told an industry seminar she would act to break open gas and power markets if competition failed to take hold in a sector in which big utilities still dominate and transparency is lacking. «Europe needs open markets. I am ready to force them open,» she said. «There can be no real step for change on energy unless the markets function openly and freely. If we are not successful in our energy policy as a commission, then we are failing as a commission,» Kroes said. The EU started liberalizing its energy markets over six years ago but in many countries former monopolies still dominate the gas and power business, keeping prices high and making it difficult for newcomers to gain a foothold. Kroes called for further separation of utilities’ grids and supply businesses and said a Brussels-led inquiry had found too much market concentration. The results of the inquiry, which has involved dawn raids on utility offices, are due in January. Preliminary results showed there was too much scope for companies to raise prices, Kroes said. Spain’s growing energy market has been the main focus of the Commission’s attention recently. On Tuesday, it told the Spanish government to change legislation giving more power to its national energy regulator or face legal action. «The Spanish government is aware that there is a European law and that that law is above Spanish law,» she told a press conference on Wednesday. «It can’t be taken that one member state is pulling our leg.» The Commission has said Spain’s regulator broke EU law by imposing conditions on a bid by E.ON for Spain’s Endesa, which the German utility this week raised to 37 billion euros ($47.1 billion), and by not keeping the EC sufficiently informed of its plans. Kroes said that there was still no real market integration across Europe’s energy markets. «In many member states… there have been problems recently,» she said. «There are still some barriers that probably will require regulatory solutions.» She added, «I am convinced that further unbundling of network and supply activities is needed to effectively remove conflicts of interest and to create the right investment incentives.» Kroes said the scope of the energy sector inquiry had widened to include the liquified natural gas (LNG) market as well as more analysis of the downstream electricity market and the way Europe’s power exchanges function. LNG, super-cooled gas is shipped to Europe by tanker from various sources around the world.
