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SPEECH/10/573

Günther OETTINGER

EU Commissioner for Energy

"Europeanisation of energy policy"

Speech of Commissioner Oettinger at the Dinner Debate with the European Energy Forum

Strasbourg, 19 October 2010

Mr. President,

Ladies and Gentlemen,

Thank you for inviting me tonight. It is a pleasure to see some familiar faces, as well as many new friends. It is always good to exchange views on energy policy with an informed audience and it is a pleasure to have the chance to do so in this relaxed setting.

My theme today is the "Europeanisation" of energy policy.

I used this word already in my first presentation to the European Parliament. As Energy Commissioner, I said, I want to contribute, with the Parliament, to an "Europeanisation" of energy policy.

What does this mean? And how do we do it?

"Europe" and "energy policy" belong together

European integration was founded on the safe use of nuclear power and the pooling of coal resources. In those days coal was the lion's share of energy supplies.

Today, there are other challenges which bring Member States together:

  • Energy security: our imports are rising while our oil and gas production is declining;

  • Climate change: low-carbon energy resources and technology are developing too slowly;

  • Energy price volatility and economic uncertainty.

  • Global developments, with developing countries demanding a larger share of the world's energy resources.

To this I could add more recent challenges:

  • The credit crisis and economic recession which have put new investments and technology markets at risk.

  • Our need for new electricity and gas networks. This will cost hundreds of billions of euros. In the UK, for example, this means doubling the rate of investment in electricity infrastructure compared to the last four decades. The question of who pays for these investments is not yet answered.

Today's leaders have come back to the philosophy which Europe started off with in the 1950ies – namely that the best way to deal with energy challenges is European cooperation.

The Europeanisation of energy policy has already started. Just to give four examples:

  • We have clear energy policy goals in terms of competitiveness, security of supply and sustainability as laid down in Article 194 of the Lisbon Treaty.

  • We have the legislation to create an open and competitive European energy market. The adoption of the third internal energy market package last year was a major step forward.

  • Our 2020 initiative, together with last year's Renewables and Emissions Trading Directives, has created a push to renewable and low–carbon energy in all Member States.

  • And we are investing EU money in energy policy: research and development (including ITER), infrastructure (including the Trans European Networks for Energy), energy funding in the Structural Funds, and more.

And we have spent almost 4 billion Euros for the Energy Recovery Programme. The Commission has tabled an Amendment to this Regulation to allow unspent funds to go the energy efficiency and renewable energy projects. We hope that an agreement on this Amendment will be found shortly.

The European Parliament has been, and still is, a strong supporter of the Commission's initiatives, and I appreciate this. You deserve an important share of the credit for what we have achieved in European energy policy.

But we must go further!

  • The internal market is still far from being integrated and competitive. As companies grow beyond national borders, their development is still constrained by a mix of different national rules and practices.

  • If the 20% target for renewables is well on track, but the objective set for energy efficiency is far from being achieved.

  • Despite a possible doubling of energy demand in developing countries in the next twenty years and despite threats or actual cuts in gas and oil imports, there is still no common external approach towards suppliers or transit countries.

The new energy strategy I am preparing will take Europe's energy policy closer to my vision of a truly Europeanised policy.

I want to take this opportunity and thank the European Parliament, and the rapporteur Lena Kolarska-Bobińska, for all the work so far on the report on the new strategy. The exchange of views is fruitful and we are grateful for your input.

Let me point out five priorities:

1. First and foremost, I want to put the spotlight on demand. In this way, we involve everyone, as everyone is an energy consumer.

Energy efficiency is not just a local issue. The Covenant of Mayors and energy labelling are examples of how European-wide initiatives can help localities and individuals save energy.

My first priority will be to put in place a new Energy Efficiency Plan. The question is not simply whether it would help to make the 20% target compulsory. It is rather what we mean with 20% savings, where can it best be achieved, which tools are needed at EU level (including financial) and to what extent can we achieve more.

2. Second, I want to improve conditions for investments in low-carbon energy. Over the next 20 years, we might need up to one trillion euros worth of investments in the energy sector – a similar amount to the sum the US found for the bank bail-out in 2008. As well as replacing large parts of our power generating capacity, we need to completely renew our electricity networks to cope with a much larger renewable production, and more decentralised power production. We need to build new import pipelines - such as Nabucco - to diversify and strengthen our gas supply.

I also want to push our economy towards the cleanest and most efficient energy technologies, for supply and consumption. We need to develop and install a new generation of technologies, from offshore wind and smart grids to Carbon Capture and Storage and second generation biomass. This should deliver the drastic reduction in greenhouse gas emissions to which we have committed, while ensuring Europe's competitiveness.

We need to establish a new method for European infrastructure development to identify the concrete projects necessary to achieve our goals:

  • An inter-connected market to deliver on competition and quality,

  • Large scale production of renewables such as wind or solar parks available to all at competitive prices,

  • EU-wide solidarity that will ensure delivery in case of disruption,

  • A grid which is "intelligent" and can accommodate new demand such as e-cars and provide energy efficient solutions.

It is about 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.

Beyond the full use of the current regulatory framework, a new infrastructure instrument is needed. This should allow us to define "networks of European interest", building on the strength of regional projects. Some of these networks have already been endorsed, such as the Baltic Energy Market and Mediterranean Ring, or new gas links in Eastern Europe. But I would like to see more networks evolving. Such strategic links would enjoy swift authorisation procedures and attractive financing. Together with the ENTSOs ten year plans, this would in effect europeanise energy network planning and implementation.

3. Thirdly, Europe's lead in technology should be extended. 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 should launch a few large scale European projects such as on storage, second generation biofuels and smart grids.

4. Fourthly, I want to bring the consumer onto our side. Citizens need to know what Europe is doing for them. You can help here.

We need better implementation of the internal energy market by Member States and we need to make sure that consumers get a good deal.

We also need to reassure individuals that our energy systems are safe. Safety of oil and gas production and transport must be guaranteed. The Deepwater accident in the US Gulf of Mexico and the Hungarian chemical spill must serve as a wake up calls to our industries, including the energy industry, not to cut corners on safety.

And we need a realistic picture of the future of nuclear energy, which currently generates around one third of EU electricity and two-thirds of EU carbon-free electricity.

Nuclear policy is an area which has been Europeanised for a long time, thanks to the Euratom Treaty. I want to establish a comprehensive European legal and regulatory framework to ensure the highest possible levels of nuclear safety and security all along the nuclear production cycle. The Commission will soon present a Directive on Nuclear Waste which should establish a Community framework for responsible management of spent fuel and radioactive waste. It should ensure that Member States provide for appropriate arrangements for a high level of safety while maintaining and promoting transparency. We will count again on Parliament's support to make this Directive the second pillar of the most advanced legislation for safe and sustainable use of nuclear energy

5. Fifthly, it is time for the EU to strengthen the external dimension of the internal market.

National sovereignty in energy is no longer an option when we have a single internal energy market, stretching from the Balkans to Scandinavia, from the Baltic to the Mediterranean. Energy independence is an illusion when gas can move around Europe from Greece to Ireland. Member States are not rivals vis-a-vis third countries. We are in the same team. The energy security of every Member State will be stronger and cheaper when the EU learns to speak with a single voice and leverage its real power.

Top level endorsement is a must.

The new energy strategy I will present early November will follow these broad themes. The various elements will be the main topics for the European Council's extraordinary meeting on energy on 4th February next year.

The February Council is a unique chance to to come to a more Europeanised energy policy – endorsed by Heads of State and Government. The European Council took the important step in 2007 on the energy policy targets. They can now help us push Europe towards a stronger, more coherent and more effective energy policy, for the good of all citizens. I welcome your support and input as we prepare for this important meeting.

Conclusion

European cooperation in energy is not yet fully mature. But further integration in energy policy really is the only way forward. It has started working for renewable energy policy, for the internal market and for emergency situations, such as the gas crisis in January 2009. Now we need to make it work continuously across the whole energy spectrum, across the whole economy and for the longer term.

The new energy strategy is very much about the actions to be undertaken in the coming eighteen months to realise our 2020 goals. We should not lose sight of the longer term. Our 2050 overall decarbonisation goals are clear in terms of emission reduction. What is therefore needed is to qualify the actions to be taken around clearly identified milestones in order to ensure that all three energy objectives will be met: sustainability, competitiveness and security.

So if we have a truly Europeanised approach in the next stage of our strategy, our task towards 2050 will be much simpler.

  • We will be able to better plan, develop and implement our actions.

  • We will find it easier and cheaper to deliver our goals.

  • We will have greater coherence, solidarity and consistency at every level of decision-making – European, national, local and individual.

  • We will have a stable investment climate for new projects and products.

  • And we will be more effective in negotiations with our external partners.

I rely on the European Parliament and our partners across society and industry to work with me to Europeanise our energy policy. In this way we can make sure that what we do benefits our economy, our environment and above all the citizens of Europe.

Thank you.


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