E.ON chief Johannes Teyssen says that Europe will continue to suffer as a result of a significant competitive advantage for the US in the area of energy.
“There is a competitive advantage for America that we cannot prevent, at least for some time,” Mr Teyssen told the Financial Times. 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.
The E.ON (FWB: EOAN) chief executive believes that the EU could lose much heavy industry due to the persistence of high energy prices, many of whom may end up in the US where shale gas aplenty has reduced natural gas there to between a quarter and a third of those in the EU.
“The price difference is unnerving some companies and deciding their investments,” he said, adding that the US advantage was “getting so big we cannot allow it to continue”.
Mr Teyssen also said that if Europe decided to embrace fracking it would still take around five years to develop that industry.
With few other options at hand, Mr Teyssen argued that European politicians concerned about industrial competitiveness should focus on repairing an EU energy policy that was becoming increasingly dysfunctional.
“There have been a lot of good intentions . . . but things are now just getting out of control,” he said. “European power is getting dirtier. The CO2 content is increasing in spite of the renewables. It is unaffordable, and it’s losing its security. So the alarm signs are tremendous.”
The transformation of the European energy scene has led to E.ON mothballing several unprofitable yet efficient gas-fired power plants.
Mr Teyssen blames generous subsidies – along with laws in Germany and other member states that prioritise renewables – for distorting the market.
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