European Market Report
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Liberalisation and personal opportunities
Following the successful conclusion to its purchase of Innogy, RWE becomes the second largest generator and electricity company in Europe with over 40MW of capacity, the third largest in terms of sales and number 4 in terms of customer numbers with about 20 million. Some indication of the importance of Innogy to RWE comes from the fact that of its 20m customers Innogy will have brought in 7 of the 20 million. What Innogy also provides for RWE - just as Powergen provides similar expertise to E.ON - is the experience of liberalisation, competition and more recently consolidation in the UK market. While German liberalisation has been on-going for some time now, the realistic introduction of competition has been stalled by various regulations and the lack of regulated Third Party Access (TPA) to networks, which have remained in the ownership of companies such as RWE and E.ON, which also have their own retail customers. What Innogy will provide to the RWE group is the necessary experience to make the changes such as supporting TPA which will require the various parts of RWE to make their own success without the support of the parent company. It will result in a set of stronger companies but the background to this will result in there being greater support for full liberalisation of the energy value chain in Germany - and along British lines.
