William Catacosinos has resigned as chairman of MarketSpan Corp., the utility formed to replace the troubled Long Island Lighting Co. Catacosinos is under investigation by...
sufficient import capacity, resulting in relatively higher electricity prices in those regions. However, according to the UCTE reliability assessment for 2004-2010, no significant reliability problems are anticipated in the short to mid term in any European grid zones. Moreover, the construction over the next two to five years of major interconnections across Europe will help to improve reliability and give the more isolated regions additional access to the continental European market.
The anticipated interconnection projects include: Belgian-French border, Belgian-Netherlands border, Spanish-Portuguese border, French-Spanish border, Swiss-Italian border, and a variety of additional connections in Southeastern Europe.
Electric Competition: Why the Incumbents Dominate
In Western Europe, where the percentage of end consumers eligible to choose their electricity supplier averages more than 75 percent, a multitude of retail suppliers has emerged. Some are the affiliates of the major European utilities, while others have a specific regional focus or a particular niche market, such as green energy. However, the number of suppliers with more than 5 percent market share is relatively low, and incumbent utilities continue to dominate.
The UK, which arguably has the most competitive supply sector in the region, has seven suppliers with more than 5 percent market share, while Norway has five. Spain, Italy, Belgium, and Austria have four, while the remaining countries have less. Only the UK, Sweden, and Finland have a significant number of foreign-owned suppliers, at 64, 40, and 21 percent, respectively. Among the Accession countries, Slovenia is the only country that stands out, with six suppliers holding more than 5 percent market share and 20 percent foreign ownership of suppliers. 5
Switching rates for large industrial customers in Western Europe in 2002 ranged from a low of 5 percent in Belgium to 45 percent in Denmark, with 20 percent being average. In the countries where residential and/or small commercial customers were free to choose their supplier in Western Europe, the rate of switching in 2002 ranged from 2 percent in Ireland to 14 percent in Norway. Scandinavia and the UK all had 10 percent and above. 6 In the Accession countries, there has been limited switching for large industrials, with only Hungary reporting more than 50 percent switching for this customer segment. 7
The impact of the competition is telling: Prices to end-consumers are steadily decreasing. In the original 15 EU members, there has been an average decrease of 11 percent for industrial and 6 percent for residential consumers from 1995 through 2002. The Accession countries have seen a contradictory trend, with prices increasing as governments reverse years of subsidized electricity and begin forcing consumers to pay the full cost of electricity.
- Richards, Mark and Georgia Quick, "Eastern Europe, Nuclear and EU Accession," Nuclear Engineering International, Oct. 31, 2002.
- The Renewable Energy Certificate System grants a renewable energy certificate (REC) for each megawatt-hour of renewable production from qualifying renewable resources. Each REC is unique, which ultimately enables these certificates to be transferred from owner to owner before being used as proof of generation, or exchanged for financial support.
- Plans are currently under way to create an Iberian market