EU electricity market 'worst of both worlds', Eluned tells key conference

21st May 2008

THE EU's current electricity market offers the 'worst of both worlds' and needs reform to boost competition, European Parliament energy rapporteur Eluned Morgan will today tell a key conference.

Speaking at a conference on competitiveness and consumers organised by the Slovenian Presidency, ELUNED MORGAN said:

"Energy is a commodity within the single market as any other but it is transported by monopolies and in many cases is dominated by incumbents

"The key therefore is to ensure that the monopolies are regulated within the member states, and that fair competition is allowed to flourish.

"Yet the fact is that this is not the case in the current energy market. In fact, at the moment we have the worst of both worlds.

"When the same company owns the transmission system the grids or the pipelines as are supplying the energy there is a vested interest in keeping competitors out.

"What possible motivation can a company have to encourage others to compete against them? The temptation will always be there to give preference to your own suppliers."

Eluned Morgan told the conference that the ultimate goal of the European Commission's new energy package should be to benefit consumers in a common European energy market.

She said: "In order for a fully functioning energy market to work, consumers must be in a position to be active players on the market. We need to ensure that regulation, competition and consumer protection go hand in hand.

"That is why I am a great supporter of full ownership unbundling both for the gas and electricity markets. We need this in order to protect and promote the consumer interest in the EU. Indeed, it has been estimated that lack of competition in the EU has cost 5bn Euros to the EU economy annually. That is something which will hurt both household and industry consumers, at a time when we are facing increasing competition from across the globe we cannot afford to allow this to continue."

For the full speech click here