ENEL chief calls for EU to scrap renewable energy subsidies

* Urges repeal of renewable subsidies

* Says lack of clarity in emissions trading scheme hurting energy firms

By Ethan Bilby

BRUSSELS, March 26 (Reuters) - The head of Italy's largest power company, Enel , said European Union governments should stop subsidising renewable energy to relieve pressure on utilities struggling with economic weakness.

"If (governments) keep levying taxes and drying up all the cash flows, then all the shareholders will walk away as they have been doing," ENEL Chief Executive Fulvio Conti told journalists in Brussels on Tuesday.

After years of recession in Europe, many analysts have declared the EU utilities sector incapable of attracting investment, with demand for power declining.

"This is true for all Europe, making the overall industry of energy uninvestable," Conti said, also calling for an end of subsidies for renewables in EU planning, which he said needlessly raised prices for consumers.

"They should try to reduce or repeal the incentive system given to renewables. We are at the stage of maturity now that we should be looking at resources, as opposed to incentives."

Conti also said the current taxes levelled on large industry in Italy made it particularly difficult for them to compete, calling some of Italy's taxation on labour "insanity."

But the company head spoke more favourably about the EU's emission trading scheme (ETS), which sets a price for carbon emissions that can be traded on an open market.

Conti said he supported an EU proposal on backloading, the temporary withholding of emission allowances in the ETS, that is due to be voted on by the European Parliament on April 16.

But he said continued lack of clarity over the scheme was hurting power firms.

"Whenever you are speaking about regulations, if they are not clear and stable they are a bad regulation."

TAPPING IN

Broadening European access to gas supplies is another priority for the Italian energy company.

Although he would like to see a new pipeline to bring gas supplies to Italy, Conti said he was not worried if the Trans Adriatic Pipeline (TAP) was not selected by Azeri gas consortium Shah Deniz versus rival pipeline Nabucco West.

The Shah Deniz consortium will decide in June which pipeline gets the go ahead to deliver sought-after gas from Central Asia to Europe.

"I'm not concerned with their initial decision. If they are not choosing one of the two, I am pretty sure that over time they will go into the other as well because there is huge potential for that specific gas," Conti said.

He said that he is more interested in buying gas from a potential TAP pipeline than becoming a stakeholder in the project.

"I'm interested in buying the gas at good conditions and if necessary I would be participating in the stake of TAP. But my primary goal is to have the gas. I am not a transporter of gas, I am a utiliser of gas," Conti said.

(Reporting by Ethan Bilby; Editing by John O'Donnell, Anthony Barker and Richard Chang)

(([e-mail])([phone])(Reuters Messaging: [e-mail]))

Keywords: EU ENERGY/ENEL