Greens warn of threat posed by liberalisation

Date: 04/05/2000

By Gareth Harding

ARGUING against greater market opening in EU circles is a bit like questioning the existence of God in front of the Pope. But although few doubt that the liberalisation of Europe's electricity markets will bring cheaper energy prices, not everyone believes this will lead to a cleaner environment.

Earlier this year, the Worldwide Fund for Nature (WWF) and Europe's cogeneration lobby launched a campaign aimed at drawing attention to the flip-side of market opening. The two groups claim that since the Union electricity directive came into force last year, liberalisation has proved to be "bad for the environment and bad for industrial competitiveness". They say cheaper electricity prices are fuelling a greater demand for energy and leading to rising greenhouse gas emissions.

But Daniel Cloquet of the European employers organisation UNICE insists the opposite is true. "As prices fall, people have more money to spend on energy efficiency," he says. "Europe cannot afford the luxury of energy saving through high prices."

UNICE argues that more competition will make it possible for small renewable energy firms and combined heat and power producers to compete on a more equal footing with the big utilities. But Cogen, which represents cogeneration companies in Brussels, says the odds are stacked against new entrants to markets still dominated by powerful state-owned monopolies.

"Our industries, which are new, efficient and clean, cannot compete with the prices of old and written-off power stations being operated at the marginal cost of the fuel without due regard for environmental impact," says director Simon Minett.

Environmental groups say they are not against market-opening in principle, just at how it has been organised in practice.

Article forms part of a survey, 'Industrial liberalisation'