PARIS, Oct 26 (Reuters) - The head of French energy market regulator CRE said on Friday there were too many players in the retail electricity sector and it was likely to consolidate as competition intensifies.
There were around 40 commercial retail electricity suppliers including former monopoly EDF as of the end of June, according to CRE’s quarterly report published in September.
Jean-François Carenco said in an interview with Le Monde newspaper the number of suppliers was still increasing.
“This is one of my concerns,” he said. “We must better control the arrival of new suppliers in the market. There are now too many actors, and consolidation will necessarily take place.”
The French retail electricity market has seen the arrival of energy giant Total, which launched its own offering a year ago, then acquired Direct Energie for $1.7 billion in April.
Consumer goods retailers Leclerc and Casino have also launch offerings, selling electricity to French households.
Other players include energy group Engie, Italy’s Eni, Sweden’s Vattenfall, and Spain’s Iberdrola.
EDF still dominates the market with a share of around 80 percent of the residential electricity market. However, the state-controlled utility is loosing around 100,000 customers every month to other suppliers, according to CRE.
Carenco said new entrants could find it difficult to unseat EDF given 65 percent of final electricity bills are made up of fixed costs, including transport and taxes.
He said some suppliers offering a discount of up to 20 percent to EDF’s fixed regulated tariff could be selling at a loss and it would be hard for them to be profitable. (Reporting by Bate Felix; Editing by Mark Potter )