New European Commission pushes ahead with new energy security policies

The European Union (EU) should purchase its gas supply as a united customer said newly installed European Commission vice-president for energy Maroš Šefčovič in Brussels this week.

The meeting of energy policy experts was called to discuss energy policy and competitiveness, both top priorities of the new Commission under president Jean-Claude Juncker and policies that Šefčovič is charged with coordinating alongside new energy and climate action Commissioner Miguel Arias Cañete.

“We’re the biggest customer in the world. We need to speak with one voice. We have to lay down a more assertive energy policy. We have to trust each other a bit more.

“We pay our bills on time. As a big customer, we should be treated as one,” Šefčovič added.

“So we should do our best to explore the common purchasing of gas.”

The new European Commission has highlighted the reduction of the EU’s annual Euro EUR400 billion bill for imported fossil fuels as one of its main aims, whilst facing the simultaneous challenges of diversifying supplies and creating a closer energy union. Bearing in mind the continuing crisis in the Middle East and violence in eastern Ukraine, this is particularly important Šefčovič said.

Despite his ebullience, Šefčovič admitted common gas purchasing would involve “a step by step approach”, not least because of its possible implications for the EU’s competition policy if it is fully implemented. But a united EU front needs to be developed ahead of the climate change global conference scheduled for September 2015 in Paris, he said.

He spoke on the day Finland and Estonia announced the construction of two, linked LNG ports one on each side of the Gulf of Finland by 2019, which could potentially ease their reliance on Russian gas.

The vice-president’s prescription for a successful EU energy policy over the next five years is as follows: first, a greater gas supply diversification including more pipelines to fields in Norway and Algeria; second, the completion of the EU’s liberalized internal market for energy, and; third, financial incentives, public and private, for more renewables.

There is another essential element, he stressed, namely the moderation of demand – especially through energy efficiency.
His call seems to dovetail with Cañete, who warned delegates that energy security is vital.

“As the recent stress tests showed, the diversification of routes and suppliers is essential so as not being at the mercy of individual suppliers. Some nations are particularly vulnerable such as the Baltics and eastern Europe,” he said.

He stressed the importance of so-called new ‘southern corridor’ of pipelines and interconnectors to get Caspian gas to EU members, reducing reliance on Russia.

Of course, countries such as the UK, Norway and Ireland who are not dependent on Moscow’s whim, would suffer only indirect energy supply problems should Russia turn off the gas taps, but they would be real.

Dominique Ristori, the Commission’s director general (top permanent official) for the energy directorate general, admitted to the meeting that current EU energy reforms promoting security and diversity are insufficiently comprehensive, “but we will be ready to improve it,” he said.

Indeed, the Commission has promised a ‘Strategy Paper on the Energy Union’ in the first few months of 2015 which aims to provide detail on key actions the EU will take during the next two years. He was looking to the planned EUR300 billion so-called Juncker Investment Plan of EU stimulus measures to be published soon, which would make a helpful contribution to the energy industry.

But such undertakings didn’t cut much ice with some of the attendees. EU energy federation secretary general Eurelectric Hans ten Berge pointed out that despite the third energy package, there was still no proper unified energy infrastructure in Europe; the 28 member states retain their own energy policies, with energy a shared responsibility between national governments and the EU.

Monica Frassoni, president of the European Alliance to Save Energy, deplored the emphasis on price in recent discussions on promoting energy security and diversity.

“The price of energy is certainly not the sole criterion of efficiency,” she said. “Nor is the cliché about the neutrality of technology. Why? Because there are some technologies which are better than others.”

But she urged delegates to be encouraged by EU energy efficiency innovation.

Beate Raabe, Secretary General of EU gas federation Eurogas was not so sanguine: “We’re facing another wake up call. We said exactly the same thing last time there was a crisis in 2009,” she said.

There seemed to be a consensus that more local solutions are required. Wind power in northern Europe; more solar power in the south.

Co-generation and district heating also received a hat-tip. So did the continuing need for coal and lignite for which one delegate spoke up persuasively.

Another speaker claimed “The EU will soon be the world’s ‘number one’ in renewables”. No serious dissent was voiced to the repeated claim that the answers to the EU’s energy challenges and source security was ‘more Europe’.

It was a glib slogan and on the evidence of the one-day meeting, a lot more energy policy work will have to be done before even that stage is reached. As the EU officials present kept reminding the audience, the new European Commission is barely one month old.