Competition Lost

Deck: 
U.S. companies' international strategies turn sour, as Europe faces a future with an oligopoly of power companies.
Fortnightly Magazine - February 1 2003
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U.S. companies' international strategies turn sour, as Europe faces a future with an oligopoly of power companies.

While the European Union is pushing to give all industrial and commercial customers electric choice by 2004, giant incumbent European utilities are increasingly dominating power markets across Europe and the United Kingdom.

U.S. companies have exited the United Kingdom and Europe in droves. Had the E.U. energy ministers' decision come a few years earlier, U.S. companies might have been in a much better position to take advantage of the opening.

But the decision has been a long time coming. After all, the European Union directed that its 15 member nations open their transmission systems to competitors back in 1996.

Today an oligopoly is developing in which as few as five or six major power utilities-including France's state-owned EDF nuclear giant, Italy's largely state-owned Enel, and Germany's privately owned utilities E.ON and RWE-could dominate European and U.K. power markets in a few years, experts say. Other contenders include Belgium-based Electrabel; Spain-based Endesa and Iberdrola; Sweden's state-owned Vattenfall; and France-based SUEZ.

None of the top utilities is based in the United Kingdom, but some have made significant inroads there. E.ON, for example, has acquired British utility Powergen, a move E.ON has described as an important step in implementing its international expansion strategy.

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