Europe requires open markets to meet its energy needs
Neelie Kroes, the European Union’s competition commissioner, did not mince her words when reporting on Europe’s energy markets on Wednesday January 10th. Europe’s energy firms have failed to invest in networks and so customers are suffering. Those “vertically integrated” energy companies such as Electricité de France (EDF) or Germany’s E.ON, widely dubbed as “national champions”, are effectively behaving like local monopolies. Shy of competition, eager for artificially high prices, they are helping to block the efficient generation, transmission and distribution of energy on the continent.
Energy prices vary wildly across Europe. Ms Kroes wants to see cheaper energy, and intends to push suppliers to divest their distribution network and to get them to invest more in transportation systems so that more energy—in the form of gas, or electricity, for example—can flow easily over borders. It is remarkably hard, for example, for gas-poor Germany to import from the neighbouring, gas-rich Netherlands. Companies that dominate national markets have, so far, had little interest in improving the interconnections which would mean lower prices for consumers across the continent.
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