UK 'faces gas hike after Spanish takeover'


THE creation of an overarching national energy champion in Spain via Gas Natural's £15bn takeover of its largest electricity generator, Endesa, will have dire consequences for competition in the EU power market, leading to higher UK household bills.

That is the warning from the UK's biggest residential energy group British Gas, whose parent Centrica is this week demanding the European Commission block the deal.

Centrica is telling Brussels competition officials that, unless it rules the deal out of bounds, it will set the European Union on a course of consolidation within national boundaries which in turn will continue to keep prices artificially high, forcing up bills for an ever more gas import reliant UK.

Heading a lobby of UK energy interests, Centrica finance director Phil Bentley told Brussels officials: 'It is critical for the economic competitiveness of Europe that full competition in energy markets is implemented swiftly and energy costs for industry and consumers are lowered.'

Citing Gas Natural's hostile approach to Endesa, which follows E.On's takeover of Ruhrgas in Germany, Bentley continued: 'We simply can't afford to allow large national champions to be further strengthened in the markets where they are already dominant, before competition has even been properly established, where we have yet to see material new entry or competition in energy supply.

'It is time for change, for the era of monopoly suppliers to end. We need to see the German and French governments set an example by following the UK and taking real steps to liberalise their markets.'

Centrica argues rising UK energy prices are largely the result of high prices on the Continent because there is no competition there at the residential supply level, meaning suppliers can carry on indexing their gas charges to the high oil price.

With North Sea output winding down, higher continental gas prices are pushing up purchasing costs for the UK's household suppliers.

UK 'faces gas hike after Spanish takeover'

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