The CEOs of 10 European utilities companies, which together own half of Europe’s electricity generating capacity, are calling for an end to subsidies for wind and solar energy.
The senior executives say the subsidies add too much power to a market already struggling with over capacity.
Reuters Newsagency reports the CEOs in the so-called Magritte Group also call for a Europe-wide capacity mechanism that would pay utilities for keeping electric power generating capacity on standby.
They also want the European Union to boost its carbon emissions scheme, whose low prices have failed to boost low-carbon fuels like natural gas and nuclear energy.
First gathered several months ago in the Brussels museum of Belgian surrealist artist Rene Magritte, the informal group has lobbied the European Commission and national governments to change EU energy policy.
They say EU energy policy has failed to achieve its triple goal of lowering prices, reducing carbon emissions and securing energy supply.
Reuters reports the group, which includes top utilities such as France’s GDF Suez, Germany’s E.ON, Spain’s Iberdrola and Italy’s Enel, has made an impact, as several countries, including Spain, Germany and France, have reviewed or are reviewing support schemes for renewable energy.
With an unprecedented joint press conference of 10 CEOs in Brussels, the Magritte group hopes to put pressure on EU policy makers ahead of an energy summit early next year.
It wants to press its case for considering wind and solar as a mature industry that no longer requires subsidies.
“European energy policy has run into the wall,” GDF Suez CEO Gerard Mestrallet said.
With power demand falling due to the economic crisis and the EU’s energy efficiency drive, wholesale power prices have dropped by about half since 2008, but retail prices for consumers have remained near record levels.
The group said that in the past four years energy bills for domestic consumers have risen 17 per cent, while bills for industrial users have gone up 21 per cent.
Reuters reports the utilities say that in a European power market already struggling with overcapacity, overly generous subsidies for renewable energy led to a wave of investment in solar and wind, which enjoys priority grid access at fixed, above-market prices and which is making existing thermal capacity uneconomical to run.
“In sectors like steel, cars and refining, when there was overcapacity, capacity was closed.
“But in the energy sector, we have massively subsidised additional capacity in solar and wind, which has led us to the absurd situation in which we find ourselves today,” Mr Mestrallet said.
Critics say the traditional utilities industry has ignored solar and wind for too long.
They say the result has been that non-utility players mainly own these new power sources: solar panels by private citizens and wind turbines by smaller energy companies, municipalities and citizens’ cooperatives.
Reuters reports the power generation overcapacity has been aggravated by the United States shale gas boom, which has led to a flood of cheap US coal to Europe as US utilities switched to gas-fired plants.
That has forced European utilities to close 51 gigawatts (GW) of modern gas-fired power plants, the equivalent of the combined capacity of Belgium, the Czech Republic and Portugal.
The closing of these flexible gas plants was jeopardising Europe’s energy security, Mr Mestrallet said, as these plants were essential back-up for intermittent wind and solar.
Mr Mestrallet said that while Europe could deal with long and cold winters such as in 2012-13, a two-week stretch of very cold weather with temperatures below minus 10 Celsius could lead to blackouts because of lack of standby capacity.
The group called on the EU to set up capacity remuneration systems that would pay utilities for standby capacity.
Efforts towards a EU-wide capacity mechanism have had little success so far but there has been a variety of national efforts to build standby systems.
