The European Commission closed an antitrust case against E.ON AG Wednesday (26 November) by formally accepting the German energy giant’s commitment to selling a fifth of its power generation capacity along with its extra-high voltage distribution network.
In a press release, the Commission states that it adopted a decision that renders legally binding a commitment by E.ON to divest around 5,000 MW of its generation capacity to address concerns regarding the electricity generation market.
The EU executive recalled it had concerns that E.ON may have withdrawn available generation capacity from the German wholesale electricity markets (to raise prices), and may have deterred new investors from entering the generation market.
Furthermore, the Commission had concerns that E.ON may have favoured its own production affiliate for the provision of balancing services, while passing the resulting costs on to final consumers and preventing other power producers from exporting balancing energy into its transmission zone.
EU antitrust chief Neelie Kroes welcomed the solution to the long-standing problem.
“This unprecedented set of remedies will fundamentally change the landscape of German electricity markets and bring the prospect of more competition and more customer choice. For the first time in European antitrust history, a company is divesting very significant assets to address competition concerns,” Kroes said.
EU spokesman Jonathan Todd said the European Commission was relieved that the E.ON case had not ended up in court.
If E.ON were to break its commitments, the Commission could impose a fine of up to 10 percent of its total turnover without having to prove any violation of the EU Treaty’s competition rules, the EU executive stated.
In a press release, E.ON welcomed the Commission’s decision and presented it as a success. “E.ON can now begin the process of divesting the agreed-on generating capacity and ultrahigh-voltage transmission system within the prescribed time frame,” the statement says.