Johannes Teyssen, the chief executive of Germany’s largest utility says Europe’s dysfunctional energy policy is exacerbating the competitive gap between the EU and US.

The E.ON (FWB: EOAN) chief told the Financial Times that the continent needs to repair its energy policy if there is to be any hope of preventing a flight of business to the other side of the Atlantic.
“There is a competitive advantage for America that we cannot prevent, at least for some time,” Mr Teyssen told the FT. He said it was “a dream” for politicians to suggest otherwise. “It will take years and long years of innovation before we can start to shrink it,” he added.

Mr Teyssen’s comments will add to growing concerns in Europe that high energy prices are encouraging manufacturers such as chemicals companies to shift investments across the Atlantic, where the shale bonanza has reduced natural gas costs to between a quarter and a third of those in the EU.

“The price difference is unnerving some companies and deciding their investments,” Mr Teyssen said, adding that the US advantage was “getting so big we cannot allow it to continue”.

Mr Teyssen said that despite good intentions, European power is getting dirtier and CO2 is actually increasing, the opposite of what was intended. “It is unaffordable, and it’s losing its security. So the alarm signs are tremendous.”

He was particularly critical of Brussels continuing to provide subsidies for renewable energy, saying that the market distortion created is threatening Europe’s energy security.

“We are feeding a giant with baby nutrition, missing the point that this giant can and needs to walk on its own feet now,” Mr Teyssen said of renewables.

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