MEMO/08/694

Brussels, 13 November 2008

Towards secure, sustainable and competitive European energy networks

Energy networks bring the electricity, gas and oil to our homes and businesses. Some cover a short distance, some cross the whole continent, but all parts are interlinked. Although often invisible, they cost a lot of money to build and create serious risks of accident and disruption if they are not properly maintained. The Commission's Green Paper on European energy networks sets out the case for a coherent strategy to help enhance the framework for the investments which are needed in energy networks to bring the benefits of European integration to all energy users – more secure supplies, more sustainable energy choices, such as renewable energy, and more competitive and efficient energy markets.

The Commission is concerned that Europe's energy networks are no longer up to the task of providing secure energy supply in the foreseeable future. Also, meeting the energy and climate targets that the EU committed itself to in 2007 will require new and modernised energy networks. Between now and 2030, it is estimated that up to €1 trillion will have to be spent on the EU's electricity network and generation capacity, and €150 billion on gas networks (excluding import pipelines from third countries).

Today's networks are based on conventional fossil fuel supply systems. They need to become more flexible, with a variety of renewable sources, more decentralised power generation, incorporating new energy demand technologies, such as "smart" metering, and able to meet new demand patterns, such as overnight battery recharging for plug-in electric vehicles.

A major benefit of a European network is that everyone can help each other build up efficient networks, as well as help each other in a crisis. The more Europe's energy networks are interconnected, the quicker energy suppliers can deal with disruptions by finding alternative supplies. However, several parts of the EU, such as the Baltic States or the Iberian Peninsula, are poorly interconnected with other parts of the EU.

The Green Paper strategy is based on three pillars. First, to make sure that energy networks help, rather than hinder, the switch to more renewable, efficient and low carbon energy. Second, to promote a fully interconnected network, including cross-border and regional links and integrating decentralised generation into the wider picture. And third, to make the best possible use of the EU funding which is available.

The EU has supported projects to improve European energy networks for over 13 years though the TransEuropean Networks for Energy (TEN-E) programme. The Commission wishes to review and up-date TEN-E. However, TEN-E is only part of several EU actions which have an impact on networks and one suggestion is to bring these actions together to make them more effective and efficient. Another idea is for a new umbrella scheme, an EU Energy Security and Infrastructure Instrument.

To give some examples of the type of projects which should be promoted by the EU, the Green Paper includes five major initiatives which would involve clustering many individual network projects involving several countries. These are:

• a Baltic Interconnection Plan to fully interlink EU countries around the Baltic and North Seas
• a North Sea offshore grid for wind energy;
• a Mediterranean energy network or "ring" to develop and share the renewable energy resources and gas reserves in North Africa;
• a Southern Corridor to bring gas from the Caspian area into the EU;
• the integration of gas and electricity systems in Central and South-Eastern Europe;
• a strategy for Liquefied Natural Gas.

In practice, these projects would bring together and give a new push to initiatives and projects which could help reform and modernise Europe's energy network.

The Green Paper is open to consultation for four months from its adoption.

More information here.