Germany's RWE says EC plan to auction EUAs will benefit rival EDF

Friday, November 28, 2008

The European Commission's plan to auction 100% of European Union Allowances (EUAs) from 2013 onwards came under fire Thursday from German utility RWE.

RWE's CEO Jurgen Grossmann believes the main beneficiary of the EC's climate change plans would be French utility EDF.

"EDF could make up to Eur50 billion ($64.34 billion) between now and 2020 in emission allowances," Grossmann said in Berlin, adding: "Paris can buy all the German groups."

EDF generates over 80% of its power from low-carbon nuclear reactors while Germany produces over 40% of its electricity from carbon-intensive coal power plants.

EDF was not immediately available to comment on the matter when contacted by Platts.

Meanwhile, as German industry continued to lobby against the EU climate change plan in the face of the financial crisis, Grossmann criticize Germany's energy policy and in particular the planned phase-out of nuclear energy.

According to Grossmann, this will force electricity producers to fall back on power plans that would emit greater quantities of CO2.

He said that the need to connect the growing number of wind farms to the grid and to build high voltage lines left German utilities more open to takeover attempts.

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