EMART Energy: E-Control’s Walter Boltz Warns That Europe is Losing Its Competitive Edge

Berlin, Germany, October 31, 2013 --(PR.com)-- “Energy prices are crucial for a region’s or country’s competitiveness,” says Walter Boltz, Executive Director Energie-Control Austria (E-Control) and Vice Chair Regulatory Board ACER. He adds: “in the United States the gas price is just a third of the European gas price. If Europe wants to avoid de-industrialisation something needs to be done against this price difference. Otherwise we will increasingly see how energy intensive industries prefer to invest in the US rather than in Europe.”

Mr Boltz is a speaker and opening session panelist at the upcoming EMART Energy which will gather more than 850 energy traders from 26-27 November in Berlin.

He regards the current key challenges to the energy markets as multifaceted. He explains: “how can back-up thermal plants be economically viable; how can we ensure intermittent power supplies complement security of supply; how can we foster competition in retail markets to reflect the improvements we have seen in wholesale markets?”

“This mindset will have to change.”

According to the E-control Executive Director some solutions to these challenges will undoubtedly increase risks for traders and producers: “for example, we are likely to see more regulatory intervention in the form of capacity mechanisms. This will inevitably impact producers and traders due to the influence of capacity markets on both near and long-term price signals.”

He notes that many of the emerging problems require cross-sector solutions. He continues: “so far we have seen gas and electricity players acting as if in separate, largely isolated boxes – for example TSOs. This mindset will have to change. Market participants will also have to bear in mind that there is no guarantee for CO2 prices to continue at the low levels we currently observe; several member states are not satisfied and consider carbon floor taxes to be ineffective.”

Shrinking market
With regards to renewable energy in the market Mr Boltz says, “The various support systems have taken competition-free bites out of the market, and the traded part of the market is shrinking. This is endangering our achievement of the original goals, i.e. market liberalisation and an integrated European electricity market. The market framework has to be designed to ensure a level playing field for conventional and renewable energy. In doing so, not only negative externalities like CO2 output but also negative effects such as the non-availability of capacities must be borne in mind.”

Lack of retail competition
He says he is surprised and disappointed that there is still no real competition at the retail level, despite the fact that there have been more market entrants, increasing liquidity and short-term trading in wholesale energy markets. He adds: “for this to happen, we need further harmonisation of market structures and regulatory frameworks to underpin competition. Competition remains the best way to reduce end-user prices, even though several member states find regulated price regimes attractive.”

EMART Energy dates and location:
Opening session: 26 November, 11.45 - 13.15
Conference and exhibition: 26-27 November
Location: Estrel Convention Center, Sonnenallee 225, Berlin, Germany