HomeCoal FiredGerman energy firms in legal bid to block EON and RWE merger

German energy firms in legal bid to block EON and RWE merger

German renewable energy retailer Naturstromà‚ has launched a legal action to try to block the merger of RWE and E.ON.

Along with ten other German energy providers, it has lodged an action with the European Courtà‚ slamming the decision of the European Commission to approve RWE’s takeover of E.ON’s conventional and renewable generation assets.

According to Naturstromà‚ and the suppliers involved in the legal action, the merger will “significantly restrict competition in electricity generation and marketing”.

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“By waving through the deal between RWE and E.ON to split up the energy market without serious conditions, the Commission has abandoned the goal of fair competition in the German and European energy market,” said Dr Thomas Banning, Naturstrom chief executive.

“That is a backward role, considering that the same commission has been pursuing liberalization of the electricity market for over 20 years.”

Naturstrom was founded in 1998, the year of the electricity market liberalization, and Banning said: “We and others have fought for years against the old monopolies and central structures with large, environmentally harmful power plants. 

“We have followed our path, consistently relying on renewable energies and decentralized structures. 

“It is becoming increasingly clear that the business models of RWE and E.ON will no longer work,” added Banning, who claims that “they can and will play out their dominant position in the respective areas and force municipal utilities and medium-sized competitors out of the market”.

The lawsuit is an action for annulment pursuant to Article 263 of the Treaty on the Functioning of the European Union.

If the lawsuit is successful, the European Commission will have to review its go-ahead for the merger.