Revised EU energy strategy to focus on supply security

Even if the EU is successful in building a low-carbon economy with a strong portfolio of renewables, dependence on energy imports will remain high and requires “management”, according to a draft of the European Commission’s second strategic energy review seen by EURACTIV. 

Less use, more independence

Greater energy efficiency is given top priority in the review as the “prime means of improving energy security, climate protection and competitiveness all at once”. 

The Commission has heard a growing chorus of voices call for more rational use of energy, from MEPs (EURACTIV 10/10/08) and industry groups alike (EURACTIV 24/09/08). France has also made energy efficiency one of the many priorities of its busy EU presidency (EURACTIV 09/10/08).

But unlike CO2 reduction and renewables, the EU has not made 20% greater energy efficiency a binding target in its climate and energy package. While there has been some speculation that the EU executive may propose a binding efficiency target, the review makes no mention of such a plan, nor does it mention any major new legislative initiatives on energy efficiency.

Instead, the EU’s 2006 energy efficiency action plan will be updated in 2009, with revision of existing ‘cornerstone’ directives in the bloc’s energy efficiency policy portfolio proposed instead. These include the Energy Performance of Buildings Directive (EPBD) and the Energy Efficiency Labelling Directive.

Mixing it up

The second chapter of the draft review suggests an increase in the range of energy supply options, whereby “a diversity of energy supplies should enter the market”. 

60% of electricity generation should be ‘low carbon’ by 2020, according to the review, which envisages nuclear and renewables taking on an equal share and sees the contribution of natural gas and coal decline. 

Oil is still expected to dominate the transport market in 2020, with electric cars making “some headway”. But the review refrains from making any more concrete predictions due to a variety of factors impacting on the sector. It also expresses some concern about the lack of the human capital and infrastructure investments required to realise low carbon economy transitions in the transport sector and in power generation and cross-border distribution in particular. 

“The magnitude of the infrastructure challenge and its importance in achieving Europe’s climate and energy goals needs to be kept in clear view,” the review says, pointing to “very substantially” different energy mixes in the EU’s member states.

The Commission emphasises that a diversification of energy supply sources should not impact negatively on relations with energy-supplying countries and third-country investors, and that care needs to be taken to address price volatility in global energy markets.

“The European market remains attractive and solvent, wtih good transparency and reasonable predictability,” while dealing with uncertainty like supply shocks is best achieved with a “well-functioning internal energy market supported by adequate crisis mechanisms,” the text says.

But EU efforts to diversify its energy supply are ruffling feathers in Russia, one of the EU’s main suppliers of oil and gas. “Russia also needs to think about diversifying its exports to other regions of the world,” Russian Deputy Head of Mission to the EU Alexander Krestyanov said in Brussels on 14 October (EURACTIV 15/10/08).

Clean tech dreams

Investment in clean energy technologies has declined in the EU in recent decades compared with the US and rapidly developing states like China. The Commission is aware of the problem, and has made greater investment in technology the third priority of the review.

Structural barriers to innovation are numerous and include commodity pricing of energy, the scale and scope of necessary innovation and existing “suboptimal” infrastructures, says the text.

Brussels is expected to deal with the issue in greater length in an upcoming communication on financing low carbon technologies, expected in November.

United we stand?

In a repeat of recommendations made as part of the chapter on energy supply diversity, the Commission considers a “well-interconnected, well-functioning internal energy market” as the “prime strength which Europe has to reduce its vulnerability to supply shocks”.

The EU executive put forward a third package of measures to liberalise and integrate the EU’s energy market in September 2007, amid concerns that national markets and actors continue to dominate at the expense of a truly Europe-wide internal energy market. Member states also frequently embark on their own national external energy policies, for example by agreeing long-term bilateral gas supply contracts with Russia, rather than ‘speaking with one voice’ to supplier countries. 

This trend was in evidence most recently during a meeting of EU energy ministers (10 October), when Germany succeeded in weakening a ‘reciprocity clause’ that would have acted as a an ‘EU investment veto’, preventing companies in third countries like Russia from acquiring European transmission assets unless they grant EU firms the same legal certainty and market-access rights as those enjoyed by foreign firms operating on EU soil (EURACTIV 13/10/08).

Meanhwile, trans-European energy infrastructures, such as a troubled interconnector across the Pyrenees, are also facing “major implementation difficulties, mainly because their European interest is not clear at local or implementation level,” the text says.

Along with the review, the Commission says it will publish a Green Paper to launch a public debate on how the “limited resources” of the Trans-European Networks for Energy (TEN-E), the main pool of EU funds available for energy infrastructure upgrades, should be spent in the coming years.

Read more with Euractiv

Battery chargers switch to low energy consumption mode

Power chargers for a range of devices including mobile phones and laptop computers will have to meet stricter energy saving requirements following the adoption of EU-wide standards on Friday (17 October).