9 yrs
Policy, Press2005

Wind energy sector criticises lack of competition in European power markets

03.02.2005

"Real competition in European power markets is a myth. It is impossible to create effective competition in the European market for renewable electricity unless effective competition is first introduced in the conventional power market. Unless the current distortions in the emerging Internal Electricity Market are overcome, there will be no effective market for renewables to compete in", said Corin Millais, CEO of EWEA.

As wind power grows, some opponents to wind power are calling for more competition in the European market for renewables, which accounts for some 5% of the EU electricity production. Half of the 5% is wind power. The remaining 95% of the European power supply is based on predominantly nuclear, coal, gas, large hydro and oil.

“Real competition in European power markets is a myth. It is impossible to create effective competition in the European market for renewable electricity unless effective competition is first introduced in the conventional power market. Unless the current distortions in the emerging Internal Electricity Market are overcome, there will be no effective market for renewables to compete in”, said Corin Millais, CEO of EWEA.

The recent Fourth Benchmarking report on the Implementation of the Internal Electricity and Gas Markets published by the European Commission reported four key reasons which have lead to significant distortions of competition:

  • too few cross-border transmission links

  • too dominant power companies

  • too biased grid operators

  • the non-existence of a liquid wholesale market.

Member States’ track record in transposing the Directives on common rules for the Internal Electricity and Gas Markets (known as the Second Liberalisation Package) has been rather poor. As a consequence, the European Commission announced on 13th October 2004 that it has commenced infringement proceedings against 18 out of 25 Member States that have failed to correctly transpose the Second Liberalisation Package.

“One has to wonder why from some quarters there is so much interest in creating competition in the 5% of Europe’s power generation that comes from renewables, and so little interest in creating effective competition in the remaining 95%”, said Millais. “When the competition question is posed to wind energy, it is wise to remember the maxim that people in glass houses should not throw stones”.

Europe is the world leader in wind energy, a technology that is vital to help address the issues of security of supply, oil and gas price instability, sustainable development, climate change, provide economic growth, technological progress and create employment and exports. In two decades, Europe will be importing 70% of its energy, up from 50% today. Europe faces an energy crunch, and wind power can help deliver a solution.