E.ON urges France to open electricity market-paper

PARIS Tue Feb 23, 2010 1:11pm IST

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PARIS Feb 23 (Reuters) - France needs to make more of an effort to open its electricity market to competition, the head of German utility E.ON (EONGn.DE), Wulf Bernotat, told Les Echos newspaper in an interview published on Tuesday.

His comments echo those of Italian energy group Enel (ENEI.MI), which last month called for more competition in France, where the state sets electricity tariffs. [ID:nLDE61E08U]

A new reform bill could force French majority state-owned power utility EDF (EDF.PA) to sell up to a third of its annual nuclear power output to domestic rival suppliers such as GDF Suez (GSZ.PA) and Poweo ALPWO.PA.

"I only see a first step towards opening up the market, that's not enough," Bernotat was quoted as saying in Les Echos. "As long as prices remain largely regulated by the state, competition is not possible."

Bernotat said the German energy market was much more open to competition than the French market.

"Unlike what we see in Germany, the (setting of the electricity) price (in France) is not geared towards the market," he said.

The European Commission has been asking the French government for years to liberalise its electricity market.

No one from the government was immediately available to comment.

Asked by Les Echos whether France has a problem opening up its market, Bernotat replied: "Yes, clearly, and not just in the area of energy."

Negotiations with EDF are continuing on whether E.ON will take a stake in the nuclear power station at Penly, Bernotat said, adding that he could not say when talks would be completed.

E.ON has said it could take an 8 percent stake in the European Pressurised Reactor, while a newspaper report last year said French oil company Total (TOTF.PA) and Enel could each acquire a similar holding. [ID:nLDE5BDOKL] (Reporting by Caroline Jacobs; Editing by Sharon Lindores)

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