"Constraints would prevent market development" - Vattenfall presents new analysis of the electricity market

Vattenfall presented its latest electricity market report, “Vattenfall’s Views on the Electricity Market 2004”, today. This is the third report that Vattenfall has published on the development of the European electricity market.

“In Europe, the concept of open power markets is still young and we have to acknowledge that in some respect the markets are still immature and learning. It would, however, be a backward step and prevent market forces from unfolding to try to solve the market’s teething problems by politically imposing constraints such as prices caps. The long-term effects would be negative for both price development and the security of supply. It is the power industry that has to take responsibility for issues like making switching easy for its customers,” said Vattenfall’s President and CEO, Lars G Josefsson, during a press-conference in Hamburg when presenting the report. Some of the report’s main points are presented below: · The deregulated electricity market is relatively new to both consumers and electricity suppliers. Consumers must stay informed about prices and agreements and the suppliers must meet the customers’ needs, not simply supply electricity. · As yet, no one can say in detail how an effective electricity market should be organised. Such a market is created step by step by making the best use of all the experienced gained. Both customers and electricity companies should contribute to the creation of a market that works well for all the parties concerned. · Electricity is a vital part of the European economy. Greater openness and competition is needed to increase the competitiveness of Europe. Competitive advantages such as large-scale operation, skill and room to manoeuvre on the market should also be put to good use. · Deregulation and market integration go hand in hand. Clear regulations will give the power industry the chance to contribute to the competitiveness of Europe. Vattenfall’s Views on the Electricity Market 2004 consists of two sections. The first section of the report contains descriptions of major changes that have an impact on the energy markets within the EU, including the European Commission’s medium-term vision for the Internal Electricity Market (IEM). It also discusses whether deregulation and competition are developing in line with expectations and analyses electricity generation on the integrated and deregulated energy markets of the future. The differences between the trading market and the consumer market are also discussed. The second section of the report presents a review of developments and trends on the European energy market, including descriptions and analyses of Vattenfall’s most important markets (the Nordic region, Germany and Poland). Vattenfall’s Views on the Electricity Market 2004 can be downloaded from the Group’s website www.vattenfall.com (select “Responsibilities” > “Reports”). It can also be ordered by e-mail (contact birgitta.lagerstrom@vattenfall.com ). For further information, please contact: Martin May, Head of Group Media Relations, phone: +46 (0) 8 739 52 70, e-mail: martin.may@vattenfall.com From Vattenfall's Press Office, telephone: +46 8 739 50 10.