LONDON, June 3 (Reuters) - The heads of Europe’s struggling utilities called on lawmakers to speed up legislative changes that they say would help them cope better with a drop in power prices and demand.
Traditional European energy companies have so far failed to reinvent themselves to operate in a new energy world where high renewable output has depressed prices and expensive gas has made their power stations unprofitable.
Speaking at the annual conference of Europe’s electricity association on Tuesday, executives called on the European Commission and national governments to speed up decision-making on schemes such as a stronger carbon support mechanism or capacity payments.
European nations are currently debating whether to make payments to standby power plants to make them available for electricity production when wind farms or solar panels fail to generate.
A capacity mechanism, which is already being introduced in Britain from 2018, would guarantee owners of power plants future revenue provided they have been successful at auction.
“Capacity mechanism systems are needed to ensure energy security,” said Jean-Francois Cirelli, whose utility GDF Suez in France took a 15 billion euro writedown on its gas storage and power plants businesses in 2013.
Oystein Loseth, chief executive of Swedish utility Vattenfall, said he wanted to see the European Union agree on a 2030 target to reduce greenhouse gas emissions, a policy that will determine what types of energy sources utilities invest in for the future.
Loseth, who will step down from his role at the beginning of October, said utilities will continue to face current market conditions until at least 2020.
“We have to adapt and accept that this is the new norm. Everyone has to find their own opportunities in this situation,” he told Reuters on the sidelines of the conference.
Vattenfall reported a full-year loss in 2013 after booking impairments of 30 billion Swedish crowns ($4.49 billion) related to its conventional power plants in the Netherlands.
Johannes Teyssen, chief executive of Germany’s E.ON , said he hoped the European Commission’s proposal to prop up the region’s carbon market by holding or releasing carbon permits would be pushed through before a new set of Commissioners takes over in November.
Europe’s utilities need quick decision-making at European and national levels to be able to make decisions about the future direction of their companies.
“Our main problem now is one of momentum. Things need to move fairly quickly to ensure that we, industrial investors, have a stable framework,” said Henri Proglio, chief executive of France’s EDF. ($1 = 6.6841 Swedish Kronas) (Reporting by Karolin Schaps; Editing by Erica Billingham)