European power firms sound alarm over energy policy

French group GDF Suez led an attack by eight leading European power companies on EU energy policy on Tuesday, saying it had "failed" and was destroying parts of the sector. In what he described as a "solemn appeal", the chief executive of GDF Suez Gerard Mestrallet told the Le Monde daily in an interview that European leaders had to wake up to the fact that "the energy policy which has been followed until now is a failure." He said: "The result is that Europe is in the process of destroying part of its energy industry. "It is urgent to redefine this policy, the ambitions and the means." His appeal was supported notably by German energy groups EON and RWE, Eni of Italy, and Iberdrola and GasNatural Fenosa in Spain. Mestrallet said: "We are not asking for subsidies, but for visibility, stable and homogenous rules in Europe, and quantified objectives up to 2030 in terms of the fight against climate warming." He argued that the European Union had failed with regard to its three announced objectives: the fight against climate warming, improving competitiveness, and the security of supply. He observed that "despite the Kyoto Protocol on reducing greenhouse gases, despite the creation of a carbon market, emissions of CO2 (carbon dioxide) in the energy sector have recently begun to rise, particularly in Germany." He also sounded an alarm over the outlook for gas-driven power stations in Europe, which he said were at a standstill for three days out of four, even though coal-powered stations, which cause a high level of pollution, "are working flat out." This arose from a slump in the price of US coal, a consequence of the boom in the US shale-gas industry. Regarding renewable energies, he said that state aid was contributing to an increase in excess capacity, thereby aggravating a problem of over-supply. "The risk of a blackout has never been higher than today," he asserted, owing to the uncompetitive position of gas-powered power stations, and the unreliable flow of energy from wind and solar powered generators.