Commission closes antitrust case against E.ON

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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The EU executive recalled it had concerns that E.ON may have withdrawn available generation capacity from the German wholesale electricity markets (to raise prices), and may have deterred new investors from entering the generation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. 

In its third liberalisation 'package' proposals unveiled on 19 September 2007, the European Commission gave member states two options to complete the liberalisation of the EU energy sector: 

  • Forcing big energy firms to sell off their power transmission and gas storage assets in order to keep these activities fully separate from energy production ('Ownership unbundling'), or; 
  • allowing firms to maintain ownership of their transmission assets but leave their management to an Independent System Operator (ISO) responsible for taking investment and commercial decisions. 

E.ON, an energy corporation based in Düsseldorf, Germany, is the world's largest investor-owned energy service provider. It has subsidiaries in most of Scandinavia, the UK, across Eastern Europe and in Russia. In order to avoid anti-trust fines from the Commission, last February E.ON made an offer to sell its electricity transmission system network "to an operator which would have no interest in the electricity generation and/or supply businesses" (EURACTIV 29/02/08). 

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