European Commission finds that only Britain and Finland have Competitive Energy Retail Markets

5th March 2007

British Energy Suppliers Cut Through EU Red Tape

The European Commission has acknowledged Britain’s position as the most competitive market in Europe by exempting it from onerous procurement regulation. It has accepted an application made by the Energy Retail Association to exempt Britain's energy suppliers1. Finland is the only other country in the European Union to be acknowledged as sufficiently competitive to warrant this exception, meaning that the 23 other member states need to fulfil the EU procurement regulation.

The Utilities Procurement Directive (2004/17/EC) - which also covers the water, transport and postal sectors - is available to companies in markets which are proved to be sufficiently competitive.

The Energy Retail Association had to provide extensive evidence that energy retailers operate within a competitive market, such as the high level of consumer switching, characteristics of pricing, metering operations and market access options and the extent that the sector is driven by consumer choice. The report was then submitted by the Office of Government Commerce to the European Commission.

Duncan Sedgwick, Energy Retail Association Chief Executive, welcomed the Commission’s decision saying: “After nearly three years of work energy suppliers have been rewarded for creating the world’s most competitive gas and electricity markets and, what’s even better is that consumers will not now have to bear the cost of millions of euros.”

Ends

1 The ERA’s application was prepared by the six main energy suppliers, EDF Energy, British Gas, ScottishPower, Powergen, Scottish and Southern Energy and npower with assistance from Gantt Consulting.