Energy summit grapples with fossil fuel habit

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EU leaders agreed to merge and strengthen energy networks at their first ever energy summit on 4 February, giving a boost to the renewable energy industry and helping to curb Europe's growing reliance on fossil fuels.

European Commission President José Manuel Barroso told EU leaders that Europe should rein in its annual €310 billion spending – equivalent to 2.5% of GDP – on oil and gas imports.

"Major efforts are needed to modernise and expand Europe's energy infrastructure," a summit accord said.

At the heart of the summit declaration was a realisation that industry is not delivering some critical energy infrastructure and that taxpayers will soon have to step in.

The summit accord acknowledged that further green growth would require a high-tech "smart" power grid – estimated to cost about €200 billion – to carry wind power from the north and solar power from the Mediterranean to central cities such as Paris and Prague.

As well as building such computer-assisted grids, the European Commission was tasked with developing standards for charging electric cars, growing sustainable biofuels and financing an energy grid overhaul.

Energy Commissioner Günther Oettinger is now expected to respond before June with a plan for "project bonds" to finance the most crucial gas and power links.

Energy security has been a hot issue in the EU since imports of Russian gas via Ukraine were cut during three weeks of freezing weather in January 2009.

Leaders agreed that funding should be found for strategically useful gas links that industry has ignored in its quest for profits, such as a link across the Pyrenees to carry Algerian gas northwards to Spain.

Oettinger was successful in strengthening his mandate for negotiating with foreign energy suppliers such as Azerbaijan.

France negotiated wording in the declaration to promote its nuclear industry, and Poland did likewise to promote shale gas exploration.

But leaders resoundingly failed to confront the fact that they are on track to fall halfway short of a target to boost energy efficiency by 20% by 2020.

"This is a mistake," said Friends of the Earth Europe campaigner Brook Riley. "The cheapest, cleanest and most secure energy is that which a country doesn't need."

(EURACTIV with Reuters.)

Speaking at the summit, European Parliament President Jerzy Buzek recalled Jacques Delors' suggestion to develop a European Energy Community. "A European 'supergrid' is one of the answers to energy independence," Buzek said.

He also stressed the importance of diversifying supply: "Solutions include oil and gas corridors in the South and in the North. Building more LNG terminals and creating sufficient strategic reserves is important."

"Investment in research and in innovations in the energy field should be the core of the 8th Research Framework Programme. Thanks to the best technologies we can achieve competitiveness and create the jobs which are the most desirable and essential for our citizens," Buzek said.

"Creating a real European Energy Community is just as important as the 1992 project," the Parliament president concluded.

Commenting on the outcome of the energy summit, German MEP and Greens/European Free Alliance group co-president Rebecca Harms said the summit had left EU energy policy at a standstill.

"A true commitment to energy efficiency is essential if the EU is to meet its energy security and climate goals, but Europe is way off track on its target of reducing energy consumption 20% by 2020. Making this target binding is the only way to ensure it is met, and we strongly regret that EU leaders missed this important opportunity to do so," Harms declared.

"Thankfully, attempts to plug nuclear by the nuclear industry and its proxies in the French and Czech governments were largely unsuccessful. Nuclear is an expensive and time-consuming distraction and EU leaders must continue to rebuff the nuclear smoke and mirrors," she concluded.

The ALDE (Alliance for Liberals and Democrats for Europe) group in the European Parliament described the summit conclusions on energy as disappointing.

Swedish MEP Lena Ek, ALDE spokesperson on energy and innovation, said: "The Council continues to show reluctance for binding energy efficiency targets and postpones the evaluation of energy performance until 2013, which puts Europe in a comparatively weak position in terms of competitiveness vis-à-vis the US or China, which are both investing heavily in renewables and the green economy."

"This summit would have been the ideal opportunity to establish synergies between the energy and innovation sectors, but it seems that the thinking is as disconnected as the networks themselves," Ek said.

Friends of the Earth Europe, an environmental NGO, is calling for a binding target to drive down Europe's energy consumption. Brook Riley, climate justice and energy campaigner at FoEEurope said: "Heads of state today faced up to the fact that Europe is not on track to meet its target for reducing energy use by 20% by 2020, but they stopped short of recommending binding legislation – this is a mistake."

"The cheapest, cleanest and most secure energy is that which a country doesn't need and the first priority should be to make the EU's 2020 energy savings target mandatory. A binding target for energy savings would contribute to solving the climate crisis, reduce household bills by up to 1,000 euros every year, and create millions of green jobs," Riley said.

Darek Urbaniak, extractive industries campaigner at FoEE, said: "The European Union's decision to assess the potential of unconventional fossil fuel sources within Europe, notably shale gas, is the wrong way to address import dependency. Shale gas poses unacceptable risks to the local environment and will lock us in to the continued use of fossil fuels."

Greenpeace welcomed the fact that renewables were at the heart of the energy summit, but expressed disappointment that "there was no progress on binding energy efficiency targets ‘for now', despite common agreement that the EU is failing in its ambitions".

Greenpeace energy campaigner Louise Hutchins said: "Leaders set their sights on the right goal – a single European energy market with renewables at its heart. A European-wide power grid is essential to channel green energy from where it is produced to where it is needed."

"Now they should make good these aspirations with binding efficiency targets and much stronger action on renewables. Nuclear and fossil fuels are costly distractions to Europe's brighter energy future and should play an ever declining role," Hutchins said.

The Friends of the Supergrid association issued a statement declaring that "the conclusions of the EU energy summit on 4 February explicitly recognise the need to build new electricity infrastructure in the EU to reach the 2020 goals in terms of energy efficiency, emissions reductions, increased RES [renewable energy source] use, the creation of a single electricity market and security of supply".

However, CEO Ana Aguado Cornago challenged the conclusions: "The lack of an explicit reference to the European Supergrid is very disappointing because without it, these objectives will not be reached. EU heads of government have missed an opportunity to explicitly support a unique and new project for this century that will create wealth and help with further market integration in the EU."

The Coalition for Energy Savings, a group of 22 businesses, professional and civil society associations, called on EU policymakers to "adopt binding commitments, supported by the necessary fiscal and financial incentives and instruments aimed at achieving better demand management, rather than focusing on securing and developing supply alone".

"By delaying strong action, the European Council is missing the opportunity to mitigate climate change whilst also reducing oil and gas dependency, kick-starting the economy with new green jobs, and reducing energy costs for consumers.," the coalition complained.

ENTSO-E, the European Network of Transmission System Operators for Electricity, welcomed the commitment to creating a competitive electricity market by declaring: "Europe's leaders have provided the direction on how European energy policy goals will be met. ENTSO-E welcomes these conclusions as they support the most urgent electricity transmission needs for action; on market integration, infrastructure permitting and public acceptance, transmission investment, and innovation."

Luc Bas, director of European programmes at the Climate Group, said that "dedicating a European summit to energy is a welcome step forward but the conclusions are a missed opportunity to give clear political signals to investors in low-carbon technologies".

"Postponing 'win-win' decisions on energy efficiency and more ambitious renewable energy policies can damage Europe's prospects for economic growth and risks losing its share of the green jobs to China in the near future," Bas said.

In 2008, the EU's 27 governments committed to increase the share of renewables in their energy mix by 20% on 1990 levels by 2020. This was intended to reduce climate-warming emissions, create new technology jobs and reduce reliance on fuel imports.

The economic crisis has slowed EU industrial output, aiding its plans to cut greenhouse gas emissions. They are currently down by about 17%. But the crisis has also hindered investment.

European governments are split between those that have put money and action behind the promised green-tech revolution, such as Germany and Denmark, and those that have merely paid lip-service to the goal.

Industry is also divided. Europe invests around €30 billion a year on green energy, but about €290 billion is needed annually to meet its targets, according to a report by Accenture and Barclays Capital.

"We are simply not moving fast enough," Lars Hansen, Europe president of Danish biotech company Novozymes, told Reuters.

"Look around and you will see massive competition taking off in the US, China and Brazil [...] We are about to lose our competitive edge,” he added.

 

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