Sustainable Competition and Development in Energy Supply: New Regulations and Strategies

By Dominique Finon

The liberalisation of electricity and gas industries has profoundly changed the energy supply business in Europe by instituting competition between suppliers in place of the former monopoly of the public utilities. At the same time sustainable development policies (limitation of CO2 emissions, promotion of renewables and of energy efficiency) imposed a new set of constraints and incentives on the competing energy suppliers and energy service companies. But these constraints turn out to be new strategic opportunities. They lead to changes in business models, with new organisations and new offers at the convergence of commercial logics and environmental obligations. However, under the influence of the market culture which dominates European and national environmental regulations, the market-based design of policy instruments makes the life of competing suppliers more complicated and more risky, even though their social efficiency is not clearly superior to that of administered instruments, in particular for the promotion of renewables.

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