EU to propose splitting energy groups to boost competition

(BRUSSELS) – Eager to fire up competition in the energy industry, the European Commission will unveil on Wednesday a sweeping shake-up, which already has many members up in arms over plans to split big power and gas companies.

The European Union’s executive arm has long lamented the lack of competition in the energy sector, and has finally drafted radical proposals aimed at breaking the tight grip that the biggest companies hold over their markets.
For Brussels, big integrated energy companies that both produce electricity and gas and deliver it through their power lines and pipelines have an inevitable conflict of interest.

Like all companies they try to increase their sales, but their control over distribution networks allows them to keep rivals from mounting serious competition.

In the Commission’s view, the answer is therefore to require gas and electricity companies to separate their supply businesses from their transmission networks.

In a slightly less drastic option, companies would be allowed to keep legal ownership of their delivery networks as long as they are run by an “independent system operator”.

The Commission’s more radical solution of requiring generation and production businesses to be separate companies already exists in 11 EU countries for electricity and seven for gas.

EUbusiness