Beware European liberalisation!
At a time when the EU appears to have moved to a point where there will be an agreement to introduce competition in gas and electricity markets down to residential customers, there has been a warning about the need to pay attention to the risks of such moves from Willem Goudriaan, deputy general secretary of the European Federation of Public Service Unions. His warning is that competition may not bring benefits to residential customers in Europe. He fears that jobs could be lost and market power could be concentrated in the hands of a small number of suppliers - presumably he expects them to operate a market to raise prices. His comments were directed to the electricity market but if they apply in that market there would be similar concerns about the gas market. There have also been some concerns in the European Parliament, where a member, Claude Turmes, has called for the need for sufficient checks and balances for market liberalisation. The agreement about utility regulators for all 15 EU countries at Barcelona should be an important factor in ensuring that the concerns expressed by Goudriaan and Turmes should be allayed. Certainly the effect of the independent regulator in the UK has been nothing if not successful.
Another concern which has been expressed relates to the effect of competitive markets on energy efficiency in Europe. Once again the necessary regulations can be put in place - such as the requirement to generate certain proportions of electricity from renewable sources - so that fears over the impact of the market can be overcome. There have been plenty of examples such as generation and the increased use of gas in power generation in the UK which has had beneficial impact on the greenhouse gases produced by generation - down 28% over the 1990's - which suggest that the concerns being expressed about the impact of the competitive market can be put to one side. One final point about competition which the Europeans have had little experience of, particularly in residential markets where the concerns about price benefits were expressed by Goudriaan. If he looks at the UK he will see that there have been price reductions of 10%-20%for all customers whatever their consumption level in the 4 and 3 years since full domestic competition began. There will be plenty of further changes to come across Europe - and whatever the detail the benefits will be available for all - consumers, employees and companies. The requirement for employees and companies is simply a willingness to embrace change - for customers even that is not a requirement since the effects of competition will drive improved prices and levels of customer service even if the customer remains with their incumbent supplier. If they change supplier they will almost certainly obtain even greater benefits! The sooner full competition is available for all the better for everyone involved.
