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EU to crack down on energy industry

30/10/2006

The European Commission is today expected to call for a radical reworking of the energy industry in the 25-nation bloc.

EU competition commissioner Neelie Kroes will demand the abolition of mechanisms preventing new enterprises from entering markets, stricter controls on long-term gas contracts and the revamping of the regulatory system.

On ownership unbundling, she will say the breaking up of energy supplying firms while owning infrastructure such as power grids and inter-connectors is an "absolute priority".

"With the infrastructure in the hands of the incumbent supply companies and electricity generators, opportunities for discriminating against competing suppliers abound," she will say.

At a conference in Lisbon, Ms Kroes will make the case for a "proper" single market for energy, overseen by regulators with "real teeth", carrying the "tools to monitor the market" and "exchange potentially market sensitive information".

Monopolies E.On and RWE in Germany and EdF and GdF in France may have to watch their step as the EU looks to boost cross-border competition.

She will say the EU has had enough of "Chinese walls" and "quasi-independence".

Her comments will come against a backdrop of mergers and takeovers. E.On is trying to acquire Spanish power firm Endesa, while the French government is backing the merger of Gaz de France and Suez in order to prevent Italian energy giant Enel from buying Suez.

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