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London, 13th Febuary 2008 - Customers, employees and shareholders alike must be wondering: ‘what next?’ in the saga of Scottish Power which has been British owned, Spanish owned and may well become French owned all in the space of a year. And all this despite a brave and successful attempt to stave off a hostile bid by German giant Eon in 2005.

The Scottish company had opted to succumb to Spain’s far smaller Iberdrola, believing this to be a much better fit, but with the ink hardly dry on this deal Europe’s obsession with concentration has once again reared its ugly head leaving the Spanish company vulnerable to an approach from French giant EDF.

It’s inconceivable how such practices can help improve competition in Europe, let alone the competitive situation in any individual member state.

The influx of European utilities in the UK has resulted in a reduction of what was originally 14 regional suppliers to a mere 6 national suppliers and, if Iberdrola is swallowed up, the 6 will become 5. Such an outcome can only serve to reduce choice for the British consumer, putting further pressure on prices which have already risen at an alarming rate.

It’s not so long ago that Scottish and Southern Energy was under the watchful eye of European predators and although it appears to have avoided them for the time being with far better than expected results, only a brave individual would bet on it maintaining its independence in the long term.

European energy giants have long been rebuked for stifling competition still further through vertical integration. They own the generation, distribution and retail sectors of the energy markets, allowing them to control prices and access throughout the supply chain.

Recent comments by British Energy would suggest that a similar situation is prevalent in the UK and that much of the price rises that have followed sheepishly since the beginning of the year to reflect a rise in wholesale prices are indeed, unnecessary.

Graham Paul, sales and marketing director of electricity4business, Britain’s leading electricity supplier to the SME sector supports British Energy’s contention: ‘no one would argue that there have not been inflationary pressures on the wholesale price of gas and electricity, but some of this can be explained by seasonal fluctuations and short-term supply problems. Furthermore, the wholesale price accounts for only a part of the final retail price and much of the risk on this would have been hedged by the big 6. The enormity of the rises is simply unjustified’.

The latest government decision to promote clean energy through new nuclear build and massive wind farm schemes hardly change the competitive picture as these too are being bought, developed and controlled by major European players, in particular by EDF, RWE and Eon.

Recent government claims that the UK has the most competitive energy markets in Europe may very well be true, but when all you have to compare with are virtual member state monopolies then it’s not surprising that the UK comes out top – but let’s not pretend that our market is anywhere near competitive.

For interviews, quotes, images or comments contact:

Emma Churchill
Communications Executive
E4B
Phone: 01908 353358
Email: echurchill@electricity4business.co.uk

Electricity4business (http://www.electricity4business.co.uk) is Britain's independent retail company specialising in the supply of electricity to small and medium sized businesses. E4Bs aim is to cut the cost for British business by offering lower prices.

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