Brussels, 11/05/2006 (Agence Europe) - In the context of the seminar organised on Thursday by Confrontations Europe (the association headed by former MEP Philippe Herzog) and EDF, entitled Integration, Dynamism and Competitiveness on the European Energy Market, the work of a first round table focused on the question of having a competitive internal energy market that ensures supply security and protection of the environment. During the debate, representatives of the industrial energy sector, the CEO of the French electricity company EDF, Pierre Gadonneix, and the CEO of the German-Swedish electricity company Vattenfall, Lars Josefsson, above all stressed the need to provide a foreseeable and stable investment framework for the market and to promote development of an oligopolistic structure to ensure that the internal energy market works as it should.
“We are at the end of an era of unawareness regarding supply security. There are no longer surplus supplies in Europe”, Mr Gadonneix explained. He went on to say: “It will therefore be necessary to invest in renewing production capacities”. For this, “one must ensure that investors want to mobilise money, hundreds of millions of euros, over one century”, the EDF CEO continued before going on to list four essential conditions for a successful internal market. In Mr Gadonneix' view, it is first of all necessary to “promote and develop trade at borders, interconnection allowing electricity generation to be optimised and ensuring supply security”. Further, he said, “large players, if not multinational companies, are needed”. He felt that the vertical integration of operators, albeit denounced by the Commission as a major factor in the dysfunction of the internal market, “is not an obstacle to competition” if supply/distribution independence and transparency are guaranteed. Recognising that, while “some mergers present a gain in efficiency, others isolate the national market”, Olivier Guersent, Deputy Chef de Cabinet for Competition Commissioner Neelie Kroes said, speaking along the same lines. “On markets that require enormous investment, competition structures are not split up. The very best structure for the market is an oligopolistic one”, he stressed. The third condition for a successful internal market, according to Mr Gadonneix, is that “prices practised”, which must not only integrate the rise in fossil fuel prices but also the rise in costs relating to the regulatory environmental constraints, “must be competitive”. He went on to conclude that “a visible and stable regulatory framework is needed”. In this context, the EDF CEO called for the rules of the game in Europe to be harmonised so that synergies play in favour of the main players.
“One must have confidence in an investment framework that is transparent and stable for calculating its return on investment”, Lars Josefsson, Vattenfall CEO, said, stressing the need to have an “adequate policy framework” for companies in the energy sector that ”want to invest” but whose impulses are checked by the lack of transparency and predictability of the market.