GDF Suez SA (GSZ) Chief Executive Officer Gerard Mestrallet urged Europe to consider shale gas and review energy policies that have led to higher power prices and carbon emissions and cut peak capacities as winter blackouts loom.
“The energy policy is a failure, whether it’s on climate, competitiveness, or securing supplies,” Mestrallet said today at a conference organized by Le Cercle des Economistes in Aix-en-Provence, southern France. “We have overcapacities on average, but shortages for peaks because we’re closing gas-fired plants like crazy.”
Europe must rebuild a “real, stable and non-erratic” carbon dioxide market, have peak production capacities “to avoid the big blackouts that are looming next winter,” boost spending on power grids and on research on unconventional oil and gas, the GDF Suez CEO said. He also called for EU nations to develop renewable energies at a cost that’s “bearable for consumers.”
Utilities including GDF Suez and EON SE are idling gas plants and turning to cheaper coal imported from the U.S. as the economic crisis in Europe and the development of subsidized renewable power have increased overcapacities under windy and sunny weather.
GDF Suez is closing, or mothballing, more than 8,000 megawatts of capacity in Europe from 2009 to 2013.
Europe needs an energy mix “that rules out no solutions, including the one that’s giving competitiveness back to the U.S.,” Mestrallet said. “Energy prices for individuals and companies are falling in the U.S.” because of shale gas, “while they are rising in Europe because of taxes and the cost of renewables, which are becoming almost unbearable in some countries like Germany.”
Shale gas is providing the U.S. with “considerable competitiveness relative to Europe,” the executive said.
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