Industry and households throughout Europe could save £40bn a year in the new liberalised market.

The EU's domestic energy supply market was yesterday opened for full-scale competition, a move that promises to help put an end to distortions that cost UK consumers £10bn last year.

The 27-member EU bloc as of 1st Jan 2007

EU citizens across the 27-member bloc can now choose their gas and electricity supplier in a move which should bring prices down for individuals and businesses.

The liberalisation of the EU energy market has been pushed by the European Commission in a bid to improve competition in energy markets which should in turn help bring prices down, encourage investment in infrastructure, secure supplies and stimulate the production of renewable fuels.

British energy groups such as Centrica, owners of British Gas, hope the market liberalisation and planned measures to break up huge continental rivals such as E.on and RWE of Germany and EDF and GDF of France will enable them to expand in mainland Europe which would be prised open to new entrants.

Until now, gas and electricity consumers have been able to choose their supplier in only nine of the 27 EU states, and all - apart from in Cyprus, Estonia, Malta and Finland - will now, backed by a European charter of energy consumers' rights to be launched on Thursday, be encouraged to switch.

Sources: http://euobserver.com | http://money.guardian.co.uk

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