EU BEATS ENERGY GIANTS

EU energy market opens to competition
Adam Plowright, July 1, 2007 (AFP via Yahoo News)

WHO
The European Commission of the European Union; EU Energy Commissioner Andris Piebalgs.
The European Union (click to enlarge)

WHAT
Market “liberalization” was officially initiated, allowing consumers to choose from the field of gas and electricity suppliers rather than giving allowing state-owned entitities monopolistic control of power supplies. The move is expected to lower consumer power rates.

WHEN
Official enactment July 1, although some countries have extensions.
Some EU nations have been fighting to achieve market “liberalization” for 11 years. Britain opened its markets to competition in 1990.

WHERE
Austria, Belgium, the Czech Republic, Denmark, Germany, Ireland, the Netherlands, Portugal, Spain and the UK already operate have competitive gas and electricity markets. Finland and Sweden have open electric markets, Italy has an open gas market, and the others must now open. Bulgaria, France, Hungary, Lithuania, Luxembourg, Northern Ireland, Poland, Romania, Slovakia, and Slovenia must open both markets as of July 1. Estonia, Greece and Portugal have extensions.
With all the struggling over individual issues, its easy to forget what an amazing project it is, all these nations with their magnificent histories coming together like this. (click to enlarge)

WHY
- Competition is expected to lower rates, saving EU consumers up to 59 billion euros/year, but national utility companies will be threatened by competition.
- Where nations have consolidated power companies to protect their national leverage, unfair competitive advantages threaten other nations’ private companies and obtain non-market rates from customers.
- Further reforms are expected, especially (1) separating power suppliers from grid owners, (2) creating cross-border grid service to promote trans-national competition, and (3) establishing stronger regulation.
- France and Germany are the most vocal opponents to “liberalization” in protection of their “national champion” power suppliers.
- In nations both for and against “liberalization” large power suppliers are merging to create greater competitive leverage for the new circumstances.

QUOTES
Pielbags: "It is undeniable that great progress has been made…However, it is equally undeniable that many of our basic objectives have not yet been achieved…Markets remain stubbornly national in scope, cross-border trade is difficult and limited, and far too many customers have little or no real competitive choice of supplier…"