MPs fear dominant energy supplier

16th March 2004, Comments 0 comments

16 March 2004 , AMSTERDAM — As the Netherlands investigates privatising the energy market, both the Christian Democrat CDA and Labour PvdA have expressed concern about advice to create an industry "giant" that would play a powerful role in the liberalised sector.

16 March 2004

AMSTERDAM — As the Netherlands investigates privatising the energy market, both the Christian Democrat CDA and Labour PvdA have expressed concern about advice to create an industry "giant" that would play a powerful role in the liberalised sector.

The Energy Council said the creation of an energy giant was an option for the liberalization of the Dutch energy sector, but the governing CDA is concerned for the creation of a monopolistic power and the negative impact on consumers.

Main opposition party PvdA has not ruled out an eventual merger, but said other measures should first be taken to ensure a good, free energy market, public news service NOS reported on Tuesday.

Currently, the Netherlands has five domestic energy suppliers and two foreign companies that cannot produce energy in the Netherlands, but are allowed to sell it to the domestic market.

After the industry is privatised, there is a strong chance that small producers will be squeezed out due to competition or will be bought up by foreign companies. This applies to Nuon, Delta and Essent, which are owned by municipalities and provincial governments.

In its advice on Economic Affairs Minister Laurens Jan Brinkhorst, the Energy Council said there is a risk that there will be just three of four companies that will survive in the Netherlands. Market forces are vital for prices consumers pay, the council said.

To therefore maintain a fifth supplier on the wholesale market, the council said a publicly-owned company should be allowed to remain. This could be created by a merger between Essent and Nuon, for example.

The government can also opt to take a minority share with special rights in a public company and will thus maintain rights over a possible takeover.

Furthermore, the council said the Netherlands is too optimistic about the success of moves to liberalise the European energy sector.

[Copyright Expatica News 2004]

Subject: Dutch news

 

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