European energy companies plead for a policy re-think

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Eight of Europe’s largest energy companies have called on EU leaders to "re-vitalise energy policy" to address the "perilous situation facing the energy sector".

The alternative, they urged, would be regulatory uncertainty and a lack of visibility that would "inevitably lead to an absence of energy investments with negative effects on security of supply, employment and reactivation of the European economy".

Meeting in Brussels before the European Council meeting on the 22nd of May – in which energy was high on the agenda – the CEOs* of E.ON, Enel, Eni, Gas Natural Fenosa, GasTerra, GdF Suez, Iberdrola and RWE agreed on a joint statement underlining the seriousness of the challenges their companies are facing.

In short, they said, European energy companies “are experiencing a perfect storm which is endangering security of supply and the transformation towards a low-carbon economy, as well as undermining their capacity to attract capital”. Their statement proposed four sets of “appropriate policy actions”, insisting that “the status quo is simply not an option”:

  • A better-designed energy market with a coordinated Europe-wide approach to capacity mechanisms so that all assets contributing to security of supply are fairly remunerated.
  •  A European carbon market able to support climate-friendly technologies and which establishes ambitious but realistic post-2020 greenhouse gas emissions targets.
  •  A more sustainable approach to promotion of renewables to reduce energy costs and promote greater convergence between Member States.
  • A strengthening of the policy framework to stimulate investment in promising technologies, such as energy storage, new renewables, shale gas and smart grids.

The CEOs stressed they remain committed to the EU’s ambition for an energy policy based on the principles of competitiveness, security of supply and sustainable development. They also “fully adhere to the need to liberalise energy markets”.

However, the reality that each of the respective energy companies has experienced over recent years is that EU and some national energy policies have “not delivered the full expected benefits”.  That is putting it mildly. They argue that action is needed to restore the confidence of energy companies in the attractiveness of Europe as an energy market.

* The CEOs that met in Brussels were Fulvio Conti (Enel), Gertjan Lankhorst (GasTerra), Gérard Mestrallet (GdF Suez), José Ignácio Sanchez Galan (Iberdrola), Paolo Scaroni (Eni), Peter Terium (RWE), Johannes Teyssen (E.ON), and Rafael Villaseca Marco (Gas Natural Fenosa).