Environmental Engineering Reference
In-Depth Information
The same message was then spread wider by international institutions
such as the World Bank to its client governments in developing countries.
And many developing countries did liberalize and privatize their energy
sectors, thereby opening up investment opportunities for rich countries'
utility companies. The welcome that some developing countries were
ready to give foreign investment in electricity contrasted with their
guarded attitude to foreign investment in their oil.
The backlash
However, many in the NGO community protested that energy privatiza-
tion in developing countries particularly hit the poor, who no longer had
the state looking after their fuel needs. Meanwhile, consumer protection
bodies in richer countries complained that the freedom (conferred by
liberalization) to choose one's energy supplier was being abused: specifi-
cally, some energy companies were using high-pressure sales tactics and
misleading information to get consumers to switch supplier. By 2009 the
tide seemed to be turning against liberalization in industrialized coun-
tries, which were beginning to realize that increasingly important issues,
such as energy security and climate change could not just be left to the
market to deal with.
In Europe, liberalization meaning the freedom and ability to choose
your energy supplier varies across the 27 countries of the European
Union. At one extreme there is France, where two companies - Electricité
de France and Gaz de France/Suez - each have more than ninety percent
of their respective retail power and gas markets, and also own the main
transmission systems (despite the fact that consumers there are legally
free to choose their supplier, as they are throughout the EU). At the other
end of the liberalization spectrum is the UK, which has six electricity and
gas companies of roughly equal size (four of them foreign-owned com-
panies, controlled by France's EdF, Germany's Eon and RWE and Spain's
Iberdrola, which owns Scottish Power) competing vigorously, by fair and
sometimes foul means to take customers off each other.
The European Commission has fought a long battle to introduce
minimum conditions for energy competition across the 27 countries. Its
particular focus has been to ensure that no electricity or gas company can
use any transmission network it may own to block rivals selling energy
into its home market. Its particular solution has been to try to “unbundle”
networks, turning them into neutral common carriers of energy for all
suppliers and all customers.
