EU energy firms dropping projects over CO2: exec

By Paul Taylor

Presenting a World Energy Council report on Europe's energy vulnerabilities, Johannes Teyssen, chief operating officer of German utility E.ON, said the EU executive should be more flexible in reforming its Emissions Trading System.

Industry had been promised a transition period phasing in the auctioning of carbon dioxide emissions permits but was now being told it would have to buy 100 percent of allowances at auction from 2013, he said.

He acknowledged that other factors, including increased investment costs, played a role in those decisions.

The World Energy Council, representing energy industries, governments and other stakeholders from 96 countries, gave broad support to the Commission's ambitious energy and climate change proposals announced last month.

MORE NUCLEAR

The report on "Europe's Vulnerability to Energy Crises" found that the EU was more dependent on energy imports and more vulnerable to crises than at any time since the 1970s.

"The EU and neighboring European countries should seriously consider including the nuclear option in their public debate and energy policies," it said.

Germany and Italy have both decided to phase out nuclear power, as has Belgium, while Austria has never had any and is fiercely opposed to atomic energy.

The report found that investment in gas pipelines and electricity grids had declined between 1998 and 2005.

(editing by William Hardy)