Friday, 14 November 2008

Ensuring Europe's energy security

Yesterday the European Commission published its Second Strategic Energy Review which forms the basis of the EU's second energy action plan (2010-2012). Given the implications this has for Scotland’s energy interests, I prepared a briefing note on what is in the Energy Review and what it means for Scotland which I have set out in this blog and the next one:

The energy security package is part of the EU's energy policy, which is based on three pillars: sustainability, competitiveness and security of supply. Each of these 3 pillars has been taken forward by three separate proposed legislative packages.

(1) Internal energy market for electricity and gas - in September 2007 the Commission proposed the third package on the internal market with the focus on opening up Europe's energy markets to greater competition and investment and ensuring effective regulation. Member State governments in the Council agreed their position in June 2008 with the EP adopting its position in July. A final agreement is expected early next year when the Czech Republic assumes the EU Council Presidency.

(2) On 23 January 2008 the Commission came forward with concrete legislative proposals for tackling climate change (20/20/20 targets by 2020) with its green energy package. This comprised legislative proposals for a new approach to actively promoting the use of renewables, updating the EU's Emissions Trading Scheme and the sharing of effort among the Member States, new rules to stimulate carbon capture and new state aid rules on the environment.

(3) This current package sets out an overall strategy for improving energy security and the need for solidarity among the member states with the focus very much on security of supply and developing the external aspects of the EU's energy policy.

The strategy is based on 5 pillars: external energy relations, requirements in terms of infrastructure and the diversification of energy supply sources, oil and gas stocks and crisis response mechanisms, better use of local resources and enhanced energy efficiency policy for buildings and products.

It charts the policy priorities for the next Commission, due to take office in September 2009.

Second Strategic Energy Review

The Commission's proposed energy security strategy is accompanied by:

  • the adoption of a new EU Energy Security and Solidarity Action Plan

  • the launch of a consultation (Green Paper) on Energy Networks for the promotion of new infrastructure to ensure EU energy security. Key is the need for member states to be better connected and linked up to the European Grid.

  • a proposed revision of the EU emergency oil stocks legislation so as to improve coherence with the International Energy Agency system, increase reliability and transparency of available oil and gas stocks. The Commission will also start consulting with a view to proposing in 2009 a revised Directive on security of gas supply. The Commission wants to see improved EU crisis response coordination as well as finding a more suitable threshold for triggering EU action.

  • a Communication on Offshore Wind – the Commission already supports the setting up of a working group to prepare a project for a North Sea offshore network;

  • a Communication in 2010 on overcoming barriers to renewable energy in the EU, focusing on practical issues such as grid constraints that could limit the 2020 target.

  • a new co-ordinated approach on improving and diversifying energy supply from outside the EU with the development of stronger relations with Norway (especially in terms of joint offshore wind projects in the North Sea), energy dialogue with Russia and speeding up negotiations for Ukraine, Moldova and Turkey joining the Energy Community.

  • the creation of an EU Energy Fund by December 2008, supported by the European Investment Bank (EIB), to mobilise large-scale funding from capital markets to invest in new low carbon technologies and energy efficiency.

  • A new Energy Efficiency Package to speed progress towards the 20% target - a Communication on the implementation of national energy efficiency action plans, a revised draft directive on buildings, a revised draft directive on the labelling of consumer products, a proposal on tyre labelling as well as combined heat and power guidelines and communication;

There will be a Communication on the financing of the Strategic Energy Technology Plan in 2009. This will also examine various additional measures to make 12 EU Carbon Capture demonstration plants a reality, including Community-level funding; Preparation of a Roadmap for a 2030-2050 Energy Policy for Europe to be published in 2010.

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