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Common energy policy for Europe takes on board most proposals in Green Paper on Energy

01.01.70

Brussels, 24/03/2006 (Agence Europe) - During the European Spring Council, on 23 and 24 March, the EU Heads of State and Government took on board most of the proposals in the Commission's Green Paper of 8 March and laid the foundations for a common European energy strategy. One day, when the history of European integration is being written, it will be said that the Energy Policy for Europe was born on 23 March 2006 under Austrian EU presidency, the president of the European Commission, Jos Manuel Barroso said with pleasure, delighted that the European Council had endorsed over twenty proposals appearing in the Green Paper and had only rejected one. In ten years' time, when you look at what happened today, you will realise that it was a historic day, the Austrian Chancellor, Wolfgang Schssel, said the day before, pleased that the European Council conclusions include the goal of 20% energy efficiency by 2020, to uncouple energy consumption from economic growth.
We would stress, among the noteworthy results of the Summit on the energy issue, that the Heads of States and Government have, in order to ensure the Union's energy supply security, accepted the principle of a common external energy policy so that the Union speaks with a single voice on the international scene and in its dialogue with supplier countries. They thus called on the Commission and the EU High Representative for CFSP, Javier Solana, to put forward proposals at the June European Council. Also, when it comes to environmental viability, the European Council agreed, under the impetus given by the Austrian Presidency, to raise the Union's objectives when it comes to the development of renewables (share of renewables and biofuels). Finally, it is worthy of note that the Commission will make an annual report on the energy situation in the Union that will serve as a base for discussions at the next Spring Summits.
Although the EU Heads of State and Government did not take a decision on stocks and reserves, they agreed, however, on the principle of strengthening solidarity and assistance mechanisms in the event of interrupted supplies, Chancellor Schssel pointed out. Although there was political consensus on the question of solidarity, the proposed Green Paper for revising the directives on supply security (electricity, gas and oil) was not included in the Council's conclusions. Also, although the Heads of State and Government stressed the need to establish long term contracts .. from both demand and supply points of view, the suggestion to set up a European Energy Supply Observatory is not included in the conclusions. Contrary to what President Barroso had said, several important proposals in the Green Paper were either abandoned or put to one side. In parallel to the plan for the promotion of renewable energies in the Commission's Green Paper, the plan for strategic energy technologies aimed at promoting technological innovation is not mentioned. Also, on the subject of completing the internal market, the conclusions do not contain the proposal on a European centre for the coordination of networks aimed at improving network security via information exchange between network managers. Above all, however, while the European Council calls for strengthened coordination between national regulators, the suggestion to set up a European regulator was totally abandoned. At a press conference on Thursday evening, Chancellor Schussel made it clear that there were strict rules whereby the European Commission is the Guardian of the Treaties and hence it is for the Commission to ensure competition, competition rules, restrict monopolies and ensure affordable prices for all consumers. He added that most Member States already have a regulator and it is not a question of establishing a new authority or a super-bureaucracy, but rather of greater cooperation among national regulators. He explained that on Thursday evening, the European Council had discussed substance rather than powers. The debate, he said, had not touched on a new treaty or amending existing powers, but rather on a European energy strategy to replace 25 national strategies. Despite sceptic comments by a number of reporters, both Schussel and Barroso stuck to their guns, arguing that the Spring European Council had given birth to an Energy Policy for Europe. Schussel added that it would need time and patience.
Outline of European Council conclusions on an Energy Policy for Europe
In order to meet the energy challenges clearly set out in the Commission's Green Paper the difficult situation on the oil and gas markets, growing dependence on energy imports, limited diversity of supply, price volatility and lack of openness on energy markets, the growth in world energy demand, security dangers in countries where fuel is produced or through which it is transported, climate change, weak interconnection in the EU, investment in infrastructure and limited coordination among players in the energy field - the European Council recommends an Energy Policy for Europe (EPE), 'aiming at effective Community policy, coherence among Member States and consistency between actions in different policy areas and fulfilling in a balanced way the three objectives of security of supply, competitiveness and environmental sustainability'. The conclusions note that 'leaving these challenges unaddressed has a direct impact on the EU environment, and jobs and growth potential.' The conclusions comment hat energy policy 'is strongly linked with environment policy and is closely connected with employment, regional policy and particularly transport policy Therefore, the European Council calls for enhanced coordination between the relevant Council formations and invites the European Commission to take into account the better regulation principles when preparing further actions.'
'This EPE should be developed with adequate knowledge and understanding of Member States' energy needs and policies, bearing in mind the strategic role of the energy sector. The EPE should therefore be based on shared perspectives on long term supply and demand and an objective, transparent assessment of the advantages and drawbacks of all energy sources, and contribute in a balanced way to its three main objectives: 1) increasing security of supply through: development of a common external policy approach in support of energy policy objectives, and the furthering of energy dialogues between the EU and its Member States on the one hand, and their main partners, be they producer, transit or consumer countries on the other hand, in synergy with relevant international organisations; intensified diversification with respect to external as well as indigenous sources, suppliers and transport routes supported by investment in the necessary infrastructure, including LNG facilities; and ensuring common operational approaches to address crisis situations in a spirit of solidarity, taking subsidiarity into account; 2) ensuring the competitiveness of European economies and the affordability of energy supply to the benefit of both businesses and consumers in a stable regulatory framework'. On the UK's request, the Council conclusions add: 'by working with Member States to complete the opening of the internal market for electricity and gas and for all consumers by mid-2007, while accepting the special circumstances of some small and isolated Member States'. The conclusions continue that full effective and transparent implementation of internal market legislation must be ensured, 'which should play also a key role for the security of supply; and promoting approaches similar to that of the internal energy market to neighbouring countries (directives to liberalise the gas and electricity markets through the Energy Community set up on 25 October 2005 that so far is made up of 10 countries in South-East Europe, Ed.) and enhancing the coordination and role of energy regulators.' The conclusions note that competitiveness should also be boosted by 'accelerating the development of regional energy cooperation within the EU, facilitating the integration of regional markets into and further development of the EU internal market, paying particular attention to the countries and regions largely isolated from the EU energy market; and fostering the rapid and coherent development of storage and infrastructure, in particular of gas and electricity interconnections with, for electricity, the target of at least 10% of Member States' installed production capacity (not yet reached by all Member States, Ed.), and as agreed by the 2002 Barcelona European Council, financing requirements should be met mainly by the enterprises involved; and revising existing directives and legal framework in order to speed up the administrative authorisation procedures for, and develop a regulatory environment more conducive to investment projects. 3) Promoting environmental sustainability. Under pressure from the Austrian Presidency, the Summit recommends adopting 'an ambitious and realistic Action Plan on Energy Efficiency bearing in mind the EU energy saving potential of 20% by 2010, as estimated by the Commission, and taking into account measures already implemented by Member States.'
The Summit also recommends that the development of renewable energies be pursued through the intermediary of a roadmap based on the Commission's analysis on how to achieve the existing objectives by 2010. Despite the scepticism of some insular member countries, the Heads of State and Government included in their conclusions quantified targets for the development of renewables, to increase the share of renewable energies to 15% by 2015 and that of biofuels to 8%. The European Council stresses, moreover, the need to define a medium and long term strategy to reduce the Union's dependency on energy imports and to implement the biomass action plan adopted by the Commission on 7 December last (EUROPE 9084). In the context of the definition of a medium and long term Union strategy aimed at combating climate change, the European Council recommends review of the Community's emissions trading system. Finally, the Heads of State and Government call for appropriate support for Community and national instruments in the research and development (R&D) field, in favour of energy efficiency, sustainable energies and technologies with low emission rates.
During the realisation of these main objectives, the Council conclusions state, the Energy Policy for Europe should guarantee transparency and non-discrimination on the markets, be in line with competition rules and be compatible with public service obligations, and also fully respect the sovereignty of Member States on their choice of energy mix. The Commission will also, at regular intervals from 2007, present a strategic analysis on the energy situation that will deal with the objectives and actions necessary for a medium and long term external energy policy. Member States may, on this occasion, take account of measures that are of European interest. Finally, the Council invites the Commission and the High Representative to collaborate on the question of a common external energy policy and to provide elements for a Community strategy that may be discussed during the next European Council (in June).
A series of indicative and foreseeable measures are included in annex to the European Council's conclusions, and may serve the objectives mentioned by the Council. We stress that, given the urgency of the challenges to be raised, the European Council invites the Commission to take the following measures as soon as possible to: - submit an ambitious and realistic Action Plan on Energy Efficiency by end June 2006; - implement the Biomass Action Plan; - finalise a priority interconnection plan and facilitate the achievement of priority infrastructure projects to contribute to diversifying supplies and to the integration of regional markets in the internal market; - strengthen energy dialogue with Russia to make it more effective as regards ratification of the Energy Charter and the conclusion of the Transit Protocol during Russia's G8 Presidency; - secure adequate priority for energy in the 7th Framework Programme; - initiate the analysis of long term supply and demand perspectives; - and improve the transparency of the energy market in particular data on gas storage capacities and oil stocks.

Expert opinion

Halter Marek

02.12.06

Halter Marek
Le College de France
Olivier Giscard dEstaing

02.12.06

Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi

02.12.06

Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace

02.12.06

Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal

01.12.06

Peter I. Hajnal
Toronto University, G8 Research Group