European utilities urge policy reform to avert black-outs

Bosses from 10 utilities representing half of Europe's power-generating capacity urged the European Union on Friday to adopt reforms to prevent black-outs and help the indebted sector adapt to future demand. The CEOs, who call themselves the Magritte Group after an initial meeting in an art gallery, said EU energy and environment policy was failing in its objectives and had raised the risk of the lights going out.
Rising electricity bills that are damaging Europe's international competitiveness were the fault of political charges and misguided subsidies for solar and wind, rather than the fault of the energy companies, they said. "We cannot have a renewables society without security of supply," said Peter Terium, chief executive of Germany's RWE "The S.O.S. signal that we are sending today is about the need to have a power market design that catches up with this reality." Without action, the CEOs said the sector would remain unworthy of investment and reliable power would be a thing of the past. "The risk of black-outs has never been higher," GDF Suez CEO Gerard Mestrallet said.
Europe's electricity bills, burdened by subsidies for renewables, are around double those in the United States, where shale gas has lowered costs, the CEOs noted. "We have to make sure the energy price is not the vehicle for translating other non-related political costs," E.ON Chief Executive Johannes Teyssen said. EU policy stretches out to 2020 with a set of policy goals to encourage sustainable, secure and affordable energy supply. They include a target to increase the use of renewables to 20 percent, cut carbon emissions by 20 percent and increase energy savings to 20 percent of projected levels.
Policymakers are expected to announce proposals for 2030 goals around year-end. They are expected to propose two goals, one for greenhouse emissions and one for renewables, while the CEOs want a single climate goal. The Commission, the EU executive, is also revising guidelines on support schemes, which could limit government subsidies for green power.