News on 29 January 2001
If the cost of energy is your overriding consideration,
then locate your facility in Belgium. According to a survey
of energy supplies across Europe, Belgium has the lowest combined
price for electricity and gas.
The survey, by Sulzer
Infra CBX, is the first to be based on tender responses for a site
with a detailed energy consumption profile. Energy companies in EU states
were asked to provide forward-looking prices for this year to supply
a 120,000 sq m manufacturing and office complex with an annual electricity
consumption of 22,800,00 kWh and using 30,780,000 kWH of
gas a year.
The results of the survey reveal wide variations in the progress of
market liberalisation, environmental taxation levels and choice of suppliers.
The survey also shows that northern Europe has a far more competitive
energy market than the southern countries.
Although EU legislation requires member countries to open their markets
to cross-border competition, in practice it is far from easy to buy
energy across national borders. Commentators have suggested that unfettered
competition in the $500bn European energy market will see prices fall
and choice increase.
Deregulation also holds out the prospect of a lucrative market in advice
and value-added services, including on-line facilities which would help
businesses manage their energy procurement across Europe, delivering
major savings.
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Mike
Cairney
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"Our survey shows that all these advantages are obviously
on the way," said Mike Cairney, Managing Director, Sulzer Infra
CBX, "but it is simply not an option at this time for a company
to purchase power from a supplier in another member state for a facility
of this nature … we are sizing up for a competitive future, but
have some way to go.
"The idiosyncracies of local markets will continue
to mean a shifting supply regime. Market knowledge and demand data will
become increasingly important. Energy is a commodity product and suppliers
must compete on more than price. Suppliers want certainty of demand
and consumption profile. In a deregulated market with an increasing
array of offers, it will be those organisations with the best information
and data that strike the best deals."
Other highlights from the survey include:
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Energy prices are dropping through competition – offset to some extent by environmental and other taxes. However, they have some way to go. Full deregulation will not be established throughout the member states until between 2007 and 2010.
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Denmark – by virtue of its extensive environmental taxation – is significantly more expensive in terms of power supply than all other member states and Switzerland.
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Six countries – UK, Spain, France, Ireland, Switzerland, Germany – were all within a close range of one another, once the cost of combined gas and electricity supply was taken into account.
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The UK – which has liberalised its power market, gradually, ahead of the rest of the EU – does not offer a more competitive regime than countries still deregulating.
As the pace of deregulation accelerates, facilities management companies with a strong technical skill-base should be well placed to offer energy services to their pan-European clients. These could range from aggregating and collating data, through negotiation and tendering to acting as a buying consortium and managing energy use to meet increasingly stringent environmental regulation.
The full survey report is available at www.sulzerinfrafm.com
