Market-based solutions key to UK government's green budget aims

The energy sector is still in the dark
ages when it comes to satisfying consumers'

Philip Lowe, Director-General for Energy at the European Commission, who came over last year from the heavyweight Competition office to undertake the Herculean task of completing the EU energy market, does not attempt to hide his frustration at the lack of progress he is witnessing. In a candid interview with EER, the veteran public servant coolly notes that `the energy market is lamentable'. The energy companies, he says, `are still in the dark ages when it comes to satisfying their customers'. They are still `primarily focused on regulation rather than on behaving like normal market-oriented players'. But politicians in the member states can be just as unreliable, adds Lowe. `They are pushing regulators for lower prices instead of letting supply and demand do their work.'

The upshot of this is that players in the financial market are still not convinced the energy market will happen. `They tell me they are still betting on national markets controlled by politicians.' Yet the Englishman is convinced that this is a bad bet. `This market is going to happen', he declares. How? Not by more regulation. `There will be no Fourth Liberalisation Package.' What has to be done, according to Lowe, is, in the end, fairly simple: `Remove the obstacles, build the interconnections, get people to compete. Start focusing on what the consumer wants, like in any normal market.'