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30/09/2016

EU leaders to square the circle of cheap energy

Energy

EU leaders to square the circle of cheap energy

squaring the circle.jpg

EXCLUSIVE / EU leaders will grapple with controversial issues including shale gas development and climate change mitigation at an energy summit on 22 May, documents obtained by EurActiv show.

As agreed at the 14-15 March summit (see background), EU leaders will meet to discuss how to lower energy prices and so improve the Union’s industrial competitiveness.  

According to the draft guidelines for the summit conclusions, prepared by the services of Council President Herman Van Rompuy, the EU heads of state intend to focus on “key aspects” of energy policy aimed at boosting growth, productivity and employment to help overcome the effects of the economic crisis.

“High energy prices and costs hamper European competitiveness,” the document says. It invites discussion on how Europe could stay competitive globally and bring down energy prices at a time when Europe is facing massive investment shortfalls in energy infrastructure and generation capacity.

Van Rompuy’s services also call on the EU leaders to discuss ways of further increasing energy efficiency, developing "indigenous resources" and facilitating investment. The Commission will be tasked with developing a “predictable climate and energy policy framework post-2020”.

Re-thinking climate policies 

An analysis of energy-price costs in member states will be requested from the EU executive by the end of 2014, highlighting the EU’s competitiveness with its global counterparts.

Competitiveness, in the EU energy policy context, translates into a re-thinking of the Union’s climate policies. 

Recently, the powerful employers’ group BusinessEurope called on European Commission President José Manuel Barroso to radically shift the EU's energy policy away from climate change mitigation towards cost-competitiveness and security of supply. [more]

The Draft Conclusions say that the EU's goal is to ensure “a level playing field for business and industry”, so they can compete in the global marketplace, having regard inter alia to the impact of carbon leakage”.

“Carbon leakage" is jargon for the relocation of European businesses abroad because of the comparative advantage they may gain from looser climate regimes.

Shale gas

Leaders are also expected to task the Commission to assess a “more systematic recourse to indigenous sources of energy, both conventional and unconventional”.

Unconventional sources usually refers to shale gas, which many believe has triggered an industrial revival in the USA, but is viewed with suspicion by several EU countries.

Regarding conventional resources, several EU countries are exploring offshore fields for gas and oil, their industrial partners being companies from the USA or Israel. The Commission has rarely played a part in these ventures.

Van Rompuy’s services say that they aim at establishing a regular exchange of information between EU countries on “major national energy decisions with a possible impact on other member states”.

Although the document gives no details, sources told EurActiv that it primarily covers upcoming decisions on new nuclear plant builds. Austria, which decided not to develop nuclear energy, has complained about potential health and environmental risks from the Mochovce and Temelín nuclear plants, sited just across the border in neighbouring Slovakia and the Czech Republic.

Large sections of the Conclusions appear in brackets or underlined, which means that countries still have to give final assent to the wording. As an example, the “positive effects” of the unbundling provisions of the Third Energy package are praised “generally”, indicating a lack of unanimity.

Background

At their 14-15 March summit, EU leaders decided to hold a series of thematic discussions on sectoral and structural issues key to economic growth and European competitiveness.

They decided that the first such discussion would be on energy, and would take place in May 2013. The next summits will be on innovation and digital and other services (October 2013) and on defence (December 2013). [more]

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