Internal Market for Electricity in Europe: A New Era or a Dark Age?

Internal Market For Electricity in Europe

“A New Era or a Dark Age?”

This study was undertaken by EPSU and supported by
Public Services International Research Unit, February 1999.

Enron president Jeffrey Skilling was quoted at an industry conference as saying electric companies must "cut costs ruthlessly by 50 or 60 percent." "Get rid of people", Skilling was quoted as advising. "They gum up the works."

“Nobody knows the consequences of competition on the electricity markets exactly. Neither does the consumer. Maybe the government should demand (temporarily) a minimum standard for the protection of electricity, to protect the consumers against themselves”. R.J.Priddle, director of the International Energy Agency

“Do advocates of liberalisation in industrialised countries, hoping to benefit from falling prices, always realise that for consumers in developing countries and economies in transition, liberalisation more often than not has exactly the opposite effect because of the removal of taxpayer or cross subsidies”. Report for the World Energy Council, Price Waterhouse.

Table of Contents

SUMMARY

INTRODUCTION

INTERNAL MARKET FOR ELECTRICITY

DANGERS

1. EMPLOYMENT AND THE INTERNAL MARKET FOR ELECTRICITY

1.1 CLEAR AND DRASTIC DIRECT EFFECTS

1.2 SOME GENERAL STATISTICS

1.3 INDIRECT JOBS - THE MULTIPLIER EFFECT

1.4 PAST AND PRESENT LOSSES: ON TECHNOLOGICAL CHANGE AND COMPETITION

1.5 WHICH GROUPS OF WORKERS WILL BE AFFECTED ?

1.6 ON ELECTRICITY AND COAL: CENTRAL AND EASTERN EUROPE

1.7 NO POSITIVE EFFECT FOUND FOR EMPLOYMENT IN HIGH-ENERGY INTENSIVE INDUSTRIES

1.8 POSITIVE EFFECTS ON RENEWABLES POSSIBLE ONLY BECAUSE OF REGULATION

1.9 NEWCOMERS IN THE MARKET

1.10 COLLECTIVE AGREEMENTS

1.11 WORKERS AND SHARE-HOLDERS

1.12 UNFULFILLED PROMISES BY THE EUROPEAN COMMISSION

CONCLUSION

2. ON THE PUBLIC INTEREST IN THE ELECTRICITY SECTOR

2.1 CONCENTRATION

2.2 MULTI-UTILITIES

2.3 CHANGES IN THE CHARACTER OF THE COMPANIES

2.4 COMPANIES GO GLOBAL

2.5 EUROPE'S GOVERNMENTS GAMBLE: A COMPLETE RE-ORIENTATION OF THE ENERGY SECTOR

2.6 MARKET FAILURE

2.7. REGULATION

2.8. PRICES

APPENDIX 1: EMPLOYMENT FIGURES

APPENDIX 2: US STUDY ON EFFECTS OF DEREGULATION ON ENERGY EFFICIENCY AND ENERGY SAVINGS PROGRAMMES

APPENDIX 3: DEMOCRATIC REGULATION