Despite its current opposition to the idea, the French government will eventually support ‘ownership unbundling’ in a “diplomatic manoeuvre” designed to protect price regulation, Charles Beigbéder, the CEO of Poweo, told EURACTIV France in an interview.
“It wouldn’t surprise me at all if at the end of the French Presidency or at the beginning of 2009, unbundling were sacrificed at the altar of price regulation,” Beigbéder said.
The CEO of Poweo, one of the few firms competing on the French electricity market, believes however that domestic price regulation is “acceptable” provided that prices are fixed at a level sufficient to allow investment.
On 14 May, France, Germany and six other member states proposed an alternative to last September’s controversial Commission proposal to force more competition on EU energy markets by breaking up energy utilities – a process referred to as ‘ownership unbundling’ (EURACTIV 16/05/08). Under the plans, French energy giants such as GDF must split their gas supply and transmission businesses or face action from the Commission (EURACTIV 23/05/08).
But Beigbéder believes resistance to unbundling may be waning. Indeed, German utilities firms RWE AG and E.ON recently announced that they will sell off their gas and electricity grids respectively to settle ongoing EU antitrust enquiries (EURACTIV 02/06/08, 29/02/08).
“The German Chancellery’s position has been weakened by the stance adopted by E.ON,” while “the resistance of the countries opposed to ownership unbundling is rather weak,” Beigbéder argues.
‘Natural monopolies’ over both energy production and distribution are “not normal”, thus it is logical that network ownership should move beyond “historical energy operators,” Beigbéder argues.
Calling for smaller firms like his own to be treated in the same way as larger ‘historical operators’ “because we are their competitors,” Beigbéder nevertheless admits “it is difficult to say” whether a compromise can be found over the Commission’s energy liberalisation plans despite the recent progress.
The question of whether distribution networks should be owned by the state or “other operators” is less relevant to the unbundling debate, he says. For him, the key issue is that “operators cannot own the network and produce [energy] at the same time”.
The EU aims to source 20% of its energy from renewable sources by 2020. In January, the Commission translated this goal into concrete targets for each member state (see our Links Dossier), giving France the objective of 23%.
Describing France’s more ambitious 23% goal as an opportunity to create wealth and jobs, Beigbéder thinks the higher target provides an ideal opportunity for French industry to draw upon its considerable expertise in renewables. “At Poweo, we consider new energy sources like wind, solar, biomass and hydro as fundamental” to our strategy, he says.
Moreover, energy saving measures, CO2 emission reductions, nuclear development and promotion of carbon capture and storage (see our Links Dossier) also have a role to play here, Beigbéder adds.