Britain calls for major energy sector reforms in EU region

Britain calls for major energy sector reforms in EU region

	Published : Tue, 22 Nov 2005 10:05 By : James Rowe Print this Story

LONDON: Britain thinks the European Union should bring in reforms in its energy sector to bring down prices and correct the anomalies identified in a recent enquiry.

British energy minister Malcolm Wicks said in a statement that lack of reforms in EU markets in spite of community directives is keeping prices unnecessarily high for consumers. Wicks will discuss the issues identified by the European Commission in its report at the EU Energy Council meeting in Brussels next week.

The energy sector in most parts of Europe is dominated by utility giants, which were earlier public sector ventures. These firms are continuing to have a monopoly and keep a tight grip on the consumers. There is hardly any competition.

The EC report has pointed out that Europe's energy companies are selling their customers short because they dominate a concentrated and uncompetitive market.

Britain's energy sector is the most competitive in the EU though most of the large utilities are owned by continental companies. The gas and power prices in the country has been the lowest in the EU though all the major suppliers are planning hikes in the rates in view of spiralling oil and gas prices.

Meanwhile, Centrica, U.K.'s largest gas supplier, has called for a more liberal European market. It said the wide variations in energy prices in Europe have been because the gas transmission networks in continental Europe are owned by the same companies that sold gas. This leads to capacity getting tied up in advance making it impossible to ship gas freely around Europe and into the U.K.

The company suggests that gas transmission networks in Germany, France and the Netherlands should be separated from the big incumbent operators who supply gas. Such a step will create a competitive and transparent market and more realistic prices.

There is apprehension of a shortage of gas in the U.K. this winter, forcing supplies to industry to be rationed to ensure there is enough for the domestic market. National Grid, which manages the country's gas transmission system, says Britain's 2,000 biggest gas users will have to cut consumption by 30 per cent for a six-week period if there was a "one in ten" winter -- the kind of winter Britain experiences once in every decade.