EU energy market blamed for inflated prices

23 November 2005 – The UK Energy Minister has called for full and frank discussions with his European counterparts on the “serious malfunctions” identified by the Commission in the European energy market.

The UK government believes a lack of reform is keeping gas and electricity prices unnecessarily high for business and domestic consumers across the EU economy.

In a scene setting speech in advance of next month’s Energy Council, Malcolm Wicks outlined to members of the European gas industry gathered in London the benefits that increased competition could bring.

In a keynote address to the European Autumn Gas Conference, held in London’s Docklands and attended by up to 500 delegates from 38 countries, he said: “The latest independent league table published today again confirms the UK as the most competitive gas and electricity market among all EU and G7 countries. For the best part of a decade our industrial and domestic prices have been among the lowest, if not the lowest, in Europe.”

He continued: “These benefits were not achieved easily but we’ve learned important lessons from which others could learn. It’s widely accepted that lack of reform in EU markets, in spite of community directives, is keeping prices unnecessarily high for consumers, industrial and household, across the Continent.

In a week’s time Wicks will chair the EU Energy Council in Brussels and will put the Commission’s interim reports at the top of the agenda. He said he would also be seeking full and frank discussion about how the EU can move the single energy market forward.

Last Tuesday the European Commission published the interim findings of its probe into the electricity and gas sectors and of its analysis of the functioning of the internal market in electricity and gas. It identified “serious malfunctions” and called on Member States to “quickly and fully implement the gas and electricity directives not only in letter but also in spirit”. The reports will be presented formally to the EU Energy Council in Brussels on 1 December.