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The Obstacles in the Creation of a Common EU Energy Policy

Energy today is one of the most import­ant issues on the world polit­ics agenda, since energy is a key ele­ment for the eco­nomy and, hence, the devel­op­ment of a state. Energy is of such a high pri­or­ity for the EU because the European Union as the largest oil and gas importer in the world is one of the main play­ers in energy field. The European Com­mis­sion (EC) and some mem­ber states (mostly the new mem­bers) have recently star­ted to push for a more coher­ent energy policy for the EU. Frank Umbach[i] believes that the events in the early 2000s sig­naled the dangers of depend­ency on a single energy sup­ply pro­vider and the events in the 1970s where oil prices reached record levels indic­ate a need to search for altern­at­ives to oil.

The EC has issued sev­eral doc­u­ments on energy draw­ing atten­tion to a lack of integ­rated plan­ning within and between the mem­ber states. The first sig­ni­fic­ant ini­ti­at­ive was the issue in 2000 of a Green Paper entitled “Towards a European Strategy for the Secur­ity of Energy Sup­ply”. This was an attempt, as Bjork­man and Math­ias[ii] observed, to form a com­pre­hens­ive energy secur­ity strategy for the EU. But as the func­tion of Green Papers is only to foster a dis­cus­sion in the com­munity over import­ant issues and not make any com­mit­ment to action, no sig­ni­fic­ant changes in the energy sec­tor came from this effort.

The EC picked up the energy mat­ters again in 2006, when it released its second Green Paper called “A European Strategy for Sus­tain­able, Com­pet­it­ive and Secure Energy”. Bjork­man and Math­ias argued that “if the 2000 Green Paper provides the blue­print for a lofty vis­ion of European energy policy, the 2006 Green Paper, sets the found­a­tion for the shape and dir­ec­tion of the EU’s future external energy policy”. The 2006 Green Paper out­lined three main object­ives for the EU com­mon energy policy, namely, to ensure sus­tain­ab­il­ity in energy resources usage, com­pet­it­ive­ness of the energy mar­ket and secur­ity of energy sup­plies. In addi­tion it iden­ti­fied six key areas where action was required to tackle energy chal­lenges, namely: com­pet­it­ive­ness and the internal energy mar­ket; diver­si­fic­a­tion of the energy mix; solid­ar­ity; sus­tain­able devel­op­ment; innov­a­tion and tech­no­logy; and external policy. The pro­gress in these six areas of the energy sec­tor was pro­posed to be tracked and presen­ted to other EU insti­tu­tions by reg­u­lar Stra­tegic Energy Reviews. Both the Par­lia­ment and Energy Coun­cil have in gen­eral endorsed the Commission’s pro­pos­als at least after the second Stra­tegic Energy Review in 2009.

The EU puts a con­sid­er­able effort in to the pro­mo­tion of energy research and the devel­op­ment of effi­cient and envir­on­ment­ally friendly energy sources under the 7th Frame­work Research Pro­gramme. Evid­ence sug­gests that EU mem­ber states even though barely coordin­ated, appear to share the ground for the sus­tain­ab­il­ity of energy and act accordingly.

A major aim of EU energy policy is to develop a single energy mar­ket in the com­munity. Yet accord­ing to Wyciszkiewicz[iii], Energy does not yet work under single mar­ket prin­ciples, primar­ily because there is a lack of inter­con­nec­ted­ness between mem­ber states; and second as Mer­itet[iv] observed States still play quite an act­ive role in their energy sec­tors. For a single energy mar­ket to oper­ate there needs to be an inter­con­nec­tion between the mem­ber states on both the phys­ical and legis­lat­ive levels. On the phys­ical level it is inter­est­ing to note, that there are still energy islands in the com­munity such as the Baltic States, Ire­land and Malta, that are either linked only to energy sources out­side of com­munity bor­ders or lack these links at all (European Com­mis­sion (2006a) ‘A European Strategy for Sus­tain­able, Com­pet­it­ive and Secure Energy’, COM 105[v]). In addi­tion as Wyciszkiewicz noted, there is still lim­ited coordin­a­tion on energy sec­tor laws and reg­u­la­tions as all mem­ber states pur­sue indi­vidual energy policies. Without shared legis­lat­ive ground and phys­ical inter­con­nec­tion of energy links it is extremely hard and even impossible for a single energy mar­ket to work.

Fur­ther­more as com­men­ted by Bary­sch[vi], not all mem­ber states show will­ing­ness to open their energy sec­tors to the single mar­ket, imply­ing privatization or at least ver­tical dis­in­teg­ra­tion of single energy com­pan­ies into sep­ar­ate energy pro­du­cing, trans­mit­ting and dis­trib­ut­ing com­pan­ies. The UK and Den­mark are pion­eers, being the first to dis­in­teg­rate and privat­ize their national energy com­pan­ies and later on to open their bor­ders for other mem­ber states’ com­pan­ies. Both afore­men­tioned states are the main sup­port­ers of the European Com­mis­sion in pro­mot­ing the single energy mar­ket. On the other side of the spec­trum accord­ing to Mer­itet, is France, which is often called “black sheep” for its reluct­ance to lib­er­al­ize the energy sector.

The last aim of a com­mon energy policy is to ensure the secur­ity of energy sup­plies. The EU, is the greatest energy importer in the world and so has a very high depend­ency on impor­ted energy: Belyi[vii] estim­ates that cur­rently over 50% of its energy is impor­ted and this amount is pro­jec­ted to increase up to 70% by 2020. For example the import of gas will increase from 57% in 2006 to 84% by 2030, and oil import respect­ively will increase from 82% to 93%. The secur­ity of sup­ply can be ensured both through the diversity of the energy mix and the diversity of energy sup­pli­ers (European Com­mis­sion (2006) ‘A European Strategy for Sus­tain­able, Com­pet­it­ive and Secure Energy’, COM 105).

While the EU is show­ing attempts to diver­sify its energy mix, espe­cially with the pro­mo­tion and expan­sion of renew­able energy, the main energy sources still remain gas and oil, the first one pre­dom­in­antly used for elec­tri­city pro­duc­tion and the second for trans­port. There­fore, energy sup­ply imports will remain essen­tial. There are also sig­ni­fic­ant dif­fer­ences in the ways that oil and gas are impor­ted. While oil has more flex­ible meth­ods for import, gas at the moment can only be impor­ted through a pipeline sys­tem. Moreover, the EU imports its gas from only three sup­pli­ers, Rus­sia, Nor­way and Algeria, of which Rus­sia presently is the main sup­plier cov­er­ing 42% of EU gas imports.

EU mem­ber states appear to share the under­stand­ing that it is extremely import­ant to ensure secur­ity of energy sup­plies, how­ever, they dif­fer on the choice of whether this goal should be achieved through com­mon and coordin­ated action or indi­vidu­ally. Wyciszkiewicz notes that Poland, with the sup­port from the Baltic States, is the greatest pro­moter of a com­mon action. It has often voiced requests for EU to speak in one voice over energy issues and has even made a pro­posal for a European Energy Secur­ity Treaty.


[i] Umbach, Frank (2007) ‘Towards a European Energy For­eign Policy?‘ For­eign Policy in Dia­logue 8(20), p.7-16

[ii] Bjork­man, Math­ias (2009) ‘The European­iz­a­tion of External Energy Policy?: The European Energy Secur­ity Debate from a Historical-Institutional Perspective’

[iii] Wyciszkiewicz, Ern­est (2007) ‘One for All – All for One” – The Pol­ish Per­spect­ive on External European Energy Policy’, For­eign Policy in Dia­logue 8(20), p.34-43

[iv] Mer­itet, Sophie (2007) ‘French Energy Policy in the European Con­text’ For­eign Policy in Dia­logue 8(20), p.25-34

[v] European Com­mis­sion (2006a) ‘A European Strategy for Sus­tain­able, Com­pet­it­ive and Secure Energy’, COM 105

[vi] Bary­sch, Katinka (2007) “Rus­sia, Real­ism and EU Unity,” Centre for European Reform Policy Brief

[vii] Belyi, Andrei B. (2003) ‘New Dimen­sions of Energy Secur­ity of the Enlar­ging EU and Their Impact on Rela­tions with Rus­sia’ European Integ­ra­tion 25, p.351-369

 

– Aleksander Thomas

Dis­claimer: This art­icle was ori­gin­ally pub­lished as ”The Obstacles in the Creation of a Common EU Energy Policy’‘ on march 5, 2013 in The European Student Think Tank, a PB cooper­a­tion partner

 

(Featured photo: AttributionNoncommercialNo Derivative Works  European Parliament, Creative Commons, Flickr)

 

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2 comments

  1. Another major obstacle to European energy integration is disputes over the source of the electricity being generated. While France generates upwards of 75% of its electricity from nuclear power, other states, including Germany, have chosen to go non-nuclear entirely. Until Europeans can settle on a common vision of energy policy with democratic legitimacy behind it, energy will stay a national competency.

  2. Another major obstacle to European energy integration is disputes over the source of the electricity being generated. While France generates upwards of 75% of its electricity from nuclear power, other states, including Germany, have chosen to go non-nuclear entirely. Until Europeans can settle on a common vision of energy policy with democratic legitimacy behind it, energy will stay a national competency.

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