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Secure our Future: Towards a European Energy Strategy

Submitted by on 25 Nov 2013 – 12:02

By Günther H. Oettinger, European Commissioner for Energy

Energy is the lifeblood of our society. Our way of life is inconceivable without reliable and affordable supplies of energy: electricity, heat and fuel. Never before has the world needed so much energy: we use almost twice as much as in 1980. If this trend continues, it will be difficult to avoid a major energy crisis, with electricity cuts, petrol or gas shortages.

We cannot afford to wait

The energy challenges are among the greatest tests which Europe has to face: We have to act to prevent global warning. At the same time, we need affordable energy prices as our economic competitiveness depends very much on competitive energy prices and a reliable energy supply. Growing EU dependence on imports from third countries is also a matter of great concern, in particular for oil (85 %) and gas (65 %). All these challenges must be addressed and require strong action.

A new strategy for the next decade

National policies are not sufficient anymore to allow a strong economic recovery and maintain our welfare. Any decision taken by one Member State has an impact on the others. Fragmented markets undermine the security of supply and limit the benefits of fair competition, while our investments for the future will only be profitable and efficient within a continental market. We must promote a common energy policy serving our joint policy objectives: competitiveness, sustainability and security of supply.

An example of the need to think internationally is gas supply. Many Member States are reliant on gas imported from Russia. We are all agreed that diversifying our gas supply will benefit citizens and businesses across the EU and we are looking to bring new, additional gas from the Caspian region to the EU. In the past few years, the EU Commission has held continuous talks with governments and companies alike to convince them to deliver gas from this region to Europe. And in June, this European effort will finally bare fruits. In Azerbaijan, the final decision will be taken on how much gas will be delivered to Europe and which pipeline project will be chosen for the first ever direct supply of Azeri gas to the EU.

In very general terms, I see 5 pillars for action to the benefit of all Member States and citizens.

Focus on energy savings

First, there is a vast amount of untapped potential to save energy, which would save money for individuals and businesses alike. Faced with commitments to reduce drastically our emissions and achieve the objective to increase energy efficiency by 20% by 2020, action on energy demand has the most potential with immediate impact for saving energy, reducing waste and maintaining our competitiveness. To this end, the EU has adopted a new energy efficiency directive which obliges Member States to implement binding measures such as an obligation scheme for energy companies to cut down energy consumption at customer level and an obligation for Member States to renovate annually 3 per cent of the central government’s building. It also encourages energy audits for SMEs and an obligation for large companies to assess their energy saving possibilities.

A strongly integrated European Energy Single Market

We should no longer tolerate barriers which impede energy flow within the EU. National borders can threaten the benefits of the Single Market, the competitiveness of our industry and the supply of basic needs to all our citizens. Fair competition, quality of service and free access must be guaranteed. The full and proper application of EU legislation is a must. But the existence of the adequate infrastructure is a condition sine qua non. It is time energy is given comparable pan-European infrastructure, as other sectors of public interest such as telecommunication and transport have enjoyed for a long time: by 2015, no Member State should be isolated from the European internal market in energy supply. This means that we have to concentrate our efforts on concrete projects necessary to achieve our goals: solidarity, an inter-connected market, new power capacities, an “intelligent grid” and large scale production of renewables available to all at competitive prices. A single European Energy Market will also increase the competitiveness of renewables, allowing excess energy generated in the sunny South to power homes in Northern Europe during times of light wind or vice-versa on blustery days in the North for cloudier days in the South.

Citizens first

These efforts should always focus on the impact on citizens. Consumers should benefit from wider choice and take advantage of new opportunities. Energy policies have to be more consumer-friendly and this will require further transparency and information: I would like all tools, like the Consumer Check List, to be improved and applied more widely. This also implies that all consumers enjoy their right to basic energy needs at all times, including in a supply crisis.

EU energy policy also aims to achieve more transparency, access to better and more information, better functioning of the retail market, development of adequate infrastructure and safety nets for vulnerable consumers. This is in addition to constant efforts for more safety and security in energy production and processing. Today, the EU represents a decisive added-value for all citizens by ensuring that the highest standards are applied in all Member States for nuclear safety and security, offshore oil and gas extraction or the development of new energy technologies. We must keep on track and continue to be vigilant.

Towards a technological shift

In energy technology, we must consolidate and extend Europe’s lead. I would like to develop a European reference framework in which Member States and regions can maximise their efforts to accelerate market uptake of technologies. Europe has some of the world’s best renewable energy companies and research institutions: we need to keep this leadership. Beyond the implementation of the Strategic Energy Technology Plan, we have already launched a few large scale projects with strong European added-value:

-Smart grids to link the whole electricity grid system to individual households and give better access to renewable sources of energy

– The ‘smart cities’ innovation partnership to promote throughout Europe integrated energy systems at local level and facilitate energy savings

Strengthening the EU leadership in the world

The EU should be a favoured partner in international negotiations. The present situation, where external partners can “divide and rule”, is untenable. The EU has the world’s largest regional energy market – 500 million people. It accounts for one fifth of the world’s energy use. We import on average around 3 million tonnes of oil equivalent every day. The EU is also the world’s biggest economic trading block. We must exploit our geopolitical weight in the world and enjoy the benefits of the Single Market. Every time that the EU has spoken with one voice, for instance in the nuclear international co-operation, it led to results. The integration of energy markets with our neighbours is a must which contributes to both our and their security. But our international relations must go further and should aim at establishing strategic partnerships with key partners. A common European policy is a strong leverage to strengthen our position in difficult negotiations and secure our international leadership.

Time for action

This year we will discuss our energy and climate goals for 2030. We will decide whether we choose three targets as we did for 2020 – CO2 reduction, increase in renewables and energy efficiency – or just one or two, and whether they should be binding or not. We must decide this year, in order to allow Member States to prepare and to give certainty to investors in industry. As Jean Monnet said: “Where there is no vision, people perish”. Our generation must take the opportunity to make of this strategic vision a reality.