Going Green

Thursday, September 20, 2007

EU Energy Policy

Breaking monopolies has been a tool of economic regulation for many years. On the surface it looks like a good idea because common sense tells us that competition benefits the consumer. I agree that competition is good, I just disagree with how the EU wants to accomplish their goal.

EU New Policy Plan Targets Energy Giants

by Staff Writers
Brussels, Belgium (SPX)
Sep 20, 2007

The European Commission proposed a new energy policy package on Wednesday, seeking to split European energy giants and curb foreign takeovers in an effort to boost competition and ensure security of supply. "An open and fair internal energy market is essential to ensure that the European Union (EU) can rise to the challenges of climate change, increased import dependence and global competitiveness.

This is about getting a better deal for consumers and business and making sure that third country companies respect our rules," said European Commission president Jose Manuel Barroso, who presented the third package of its kind.

Despite progress made after the opening up of the European energy markets to competition, a process which started 10 years ago, the commission said there were still serious challenges regarding all aspects of energy provision and use.

One outstanding problem stood with big European energy companies such as RWE and EON in Germany and EDF and Suez in France, which now control both the generation and the transmission of their gas and electricity.

The European Union's executive arm has long sought separation of production and supply from transmission networks in the energy sector. In its controversial proposal, it listed two options, the so-called ownership unbundling and the approach of "independent system operator."
Under the ownership unbundling, an option preferred by the commission, EU energy giants will be forced to sell...(complete story

I believe that deregulation is the answer. Admittedly it has its dangers, but a free market with oversight for abusive behavior is preferred. Competition is advantageous, but let the marketplace determine how it is to come about. Don't force it through regulation. Monopolies arise out of efficiency or necessity or by regulation. If companies become inefficient in a free market, competition will arise. Let it arise.

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