Deregulation in the E.U. is racing ahead, posing a challenge for U.S. firms. Yet the outcome is uncertain, as EdF, the giant of Europe, has yet to show its hand.
Eighty percent of the European power market will be open to retail competition, or liberalized, by 2003. The fundamental framework for shifting to a competitive market in Europe has some striking differences to the transition in the United States. Some primary contrasts with the U.S. transition include
* the startling speed of change, especially in Germany;
* the central authority of the European Union to mandate an open pan-European market;
* a known date-certain for opening European markets;
* the distinct national cultures and business practices that characterize each E.U. member state; and
* the greater concentration of ownership of generation and transmission assets in European countries relative to the United States.
These fundamental factors will profoundly affect the transition and outcomes of the European and U.S. restructuring initiatives, as well as define and explain their differences. Comparison of these restructuring processes, and the strategic business models being adopted in each market, provides valuable lessons and opportunities for companies in the global power market.
The Grand Tour: Germany, UK, Spain et al.