EU Needs More Energy Competition Says OECD

Needs better prices and more security

The EU needs greater competition in its energy markets to deliver lower prices to consumers and make energy supplies more secure, the Organization for Economic Cooperation and Development (OECD) said Sept. 20 in an economic survey of the European Union. The call echoed proposals made this week by the European Commission for major gas and electricity suppliers to give up their power grids and gas pipelines in the hope of infusing more competition into the sector.

The OECD said that "the network needs to be effectively separated from the generation and supply activities and national markets should be linked together better to create regional or pan-European energy markets."

The OECD said that the EU's recent Energy Policy for Europe is a step in the right direction and also called for more competition in telecoms, transport, ports and postal services in the 27-nation bloc.

But it noted that the energy sector is an area where there has been a tendency to try to protect national companies. This highlights "a clash in view between those who believe that national energy champions are the best way to guarantee a secure supply of energy and to retain some buying power over foreign suppliers, and those who argue that a liberalized, integrated European market is not only more efficient but is also more secure."

The report pointed out that the European sectors that have been liberalized the most, such as air transport and telecoms, have delivered lower prices and better service for consumers and other firms alike.

Copyright Agence France-Presse, 2007

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