EU announces energy market reforms

23 September 2007
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24 September 2007 | Paul Snell

Europe needs a more liberal energy market if businesses are to remain competitive and energy supplies secure, according to the EU energy commissioner.

Announcing the proposals Andris Pielbags described the plan as "truly ambitious".

"If we allow a market to persist where incumbents have a commercial interest in limiting new investment, thereby pushing up prices and making them profits at the expense of our citizens, we should not be surprised if in the future more and more of the EU faces an energy shortage," he said.

Proposals include breaking up national monopolies to encourage more investment in energy networks and create cheaper prices. It also recommends harmonising the powers and independence of energy regulators across Europe. The changes follow an EU investigation into competition in the market, which concluded markets "don't function properly" (18 January 2007).

The CBI welcomed the proposals. Michael Roberts, director of business environment policy, said: "The European Commission is right to prioritise market liberalisation. Doing nothing is not an option. As the UK has become a net gas importer, higher prices caused by flaws in the EU markets have cost UK gas consumers over £1 billion in some winters. Full unbundling would be the most direct way to address these concerns, and we would see this as the default approach."

According to research published earlier this year, the UK currently has the most competitive energy market in Europe (25 June 2007).


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