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Deregulation to blame for blackouts?

By CNN's Paula Hancocks

Stranded commuters at Rome's Termini train station
Stranded commuters at Rome's Termini train station

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Power went out suddenly in just about all of Italy.
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(CNN) -- The day after Italy's worst blackout since World War II, the question being asked is: "Who turned out the lights?"

The European Commission had already warned Rome to invest more in its power transmission grid and new power stations -- calling Italy one of the weakest links in the complicated trans-European power network.

Italy is more dependent on importing power than any other country in the European Union, taking 17 percent of its electricity from France, Switzerland, Austria and Slovenia.

"It makes sense to trade in energy and electricity in the same ways it makes sense to trade in other products," says Jan Murray of the World Energy Council.

"Some countries can do it more easily and more cheaply than others, and so it makes sense. But it has to be balanced against security of supply."

But even France -- the EU's biggest producer of surplus electricity -- had to import supplies this summer.

The heat wave across Europe created a combination of rising demand for air conditioning -- and droughts that reduced the amount of hydropower available.

Italy itself, though, decided to close down its nuclear power production in the late 1980s, leaving itself short of capacity.

"Only very, very recently the new government energy plan has decided to invest in new capacity to give incentives and promotion of new capacity generation," says Carlo Andrea Bollino, chairman of GRTN, Italy's power grid.

"But new projects will come into effect two years from now, so therefore now we are suffering from this fragility."

Italy is the fourth European country to suffer serious blackouts in just two months. One area of blame, according to experts, is the deregulation of energy markets across Europe.

Increased competition has led to lower electricity prices -- and less disposable cash to invest in power equipment.


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