The week ends on a great note with a major victory in the EC’s battle against the big European energy companies seeking to retain their de facto monopolies on supplying small customers. One of the largest, E.ON of Germany has at last agreed to divest its electricity grid from its electricity generation and supply business - ‘unbundling’ in the jargon. This has been shown in market after market to be a vital step in the introduction of true competition. It is one which the old British Gas took voluntarily over a decade ago when it separated into BG plc, Transco and Centrica, greatly to the benefit of the
Significance for the UK is that until the continentals open their markets, (particularly for gas) we will be at the mercy of (e.g.) spikier marginal prices on cold days and other market-distorting inefficiencies, that all add up to boost our prices unnecessarily. E.ON's move is a step in the right direction.
Are we allowed a little Friday Schadenfreude ? When still in “no way” mode E.ON, which has huge political clout, lobbied the German government to line up against the EC; and Merkel duly formed an unholy alliance with Sarkozy (at his nationalistic worst on this kind of issue) and 6 other refusenik countries to resist Competiton Commissioner 'Steely' Neelie Kroes. Merkel is not best pleased now to find herself undercut by E.ON. There’s a lesson here, Madam …
Oh, and gold at a new record price too. Extra flowers all round for Mothering Sunday – and a good weekend to everyone !