Utility GDF Suez SA's (GSZ.FR) sees its prospects in Europe limited by a lingering economic crisis and competition from heavily subsidized renewable sources, its chairman and chief executive Gerard Mestrallet said Tuesday.

" Europe in terms of thermal power generation isn't our priority," he said at a press conference. "We're cutting power generation volumes there."

Subsidies for renewable energy are turning traditional power production into a losing proposition in Europe . By the end of 2013, GDF Suez had mothballed around 10 gigawatts of capacity and placed about half that under under review.

This "shock treatment" was the only possible reaction in the face of what remains a "difficult situation," Mr. Mestrallet said.

GDF Suez joined 11 European utilities late last year in urging an end to support for "mature renewables," such as onshore wind and solar powers.

Beyond Europe , the group is concentrating on small to mid-sized acquisitions to keep debt under control and retain its A-type rating, Mr. Mestrallet said. GDF Suez was carrying 45 billion euros ($61 billion) of debt after it acquired International Power in 2012. The load was reduced to EUR30 billion by mid-2013, a year and a half ahead of target.

He denied rumors that the group was eyeing Talisman Energy.

Asked about French President Francois Hollande's proposal to create a Franco-German venture in energy, Mr. Mestrallet said his group would join if the joint effort was in its interest.
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