Energy In Europe: The True Power Of Deregulation Is Yet To Be Realized

Sulzer Infra CBX, a leading provider of business support solutions to the European energy and telecommunications industries, announced the results of a double-blind survey among European energy suppliers. The results are surprising. Agreement about the extent and success of deregulation isn’t to be found in Europe, and most energy suppliers have widely different views on everything-environmental taxation levels, choice of suppliers, the evolution of market liberalization and the existence of cross-border competition. Since the 1996 Directive on energy deregulation, many industry decision makers have felt that there was great potential for expanded competition and a consequent reduction in prices for domestic and business purchasers of gas and electricity. While most of the survey respondents feel that this will certainly be the case, it will be a longer and more painful process than had originally been envisaged.

Conclusions of the survey include:

  • The full impact of deregulation will not begin to have a substantial effect on prices until sometime between 2007 and 2010 (by which time full industry deregulation is expected to be completed).
  • Competition is significantly more advanced in Northern Europe-Germany, Austria, Switzerland and Benelux. The Mediterranean countries have not responded with significant competitive aggression.
  • Denmark, by virtue of extensive environmental legislation, is by far the most expensive country in Europe.

“The idiosyncrasies of local markets will continue to mean a shifting supply regime,” said Mike Cairney, Sulzer Infra CBX’s managing director. “Market knowledge and demand data will become increasingly important. Energy is a commodity product and suppliers must compete on more than price.”

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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