Single Market

E.U. Seeks Better Coordination on Energy

Energy policy paper DPA
Brighter prospects for energy union. Source. DPA
  • Why it matters

    Why it matters

    If the European Union succeeds in consuming less energy and reducing dependence on Russian imports, this could change the energy market significantly.

  • Facts

    Facts

    • None of the top 10 solar companies in the world are in the European Union.
    • The E.U. meets 55 percent of its energy needs with imports.
    • The paper calls for financial incentives for energy-saving building renovations.
  • Audio

    Audio

  • Pdf

The European Union, which is becoming increasingly dependent on foreign oil and gas imports, wants to boost the coordination of energy purchases within the 28-nation bloc and increase joint spending on energy research and development, according to working paper seen by Handelsblatt.

“We are losing ground when it comes to clean, low-carbon technologies. We can’t ignore these facts any longer,” wrote the staff of Maros Sefcovic, the vice president of the European Commission, in a paper.

Mr. Sefcovic is responsible for creating an energy union to reduce the E.U.’s dependence on imported fossil fuels, raise energy efficiency and put Europe at the forefront of developing renewable energies. The European Commission’s larger goal is to better coordinate with countries on energy policy.

The paper stated that if countries don’t overcome the national fragmentation of the energy landscape, high economic, social and environmental costs will make it harder to achieve a lower carbon economy.

The recommendations listed in the paper about energy union will be made public on February 25 in Brussels.

The E.U. meets 55 percent of its energy needs through imports.

The energy union project is one of the political priorities introduced by the commission president, Jean-Claude Juncker. His goals include improving the reliability of supply, creating an internal energy market and reducing the amount of carbon dioxide generated by companies.

“Our current energy policy is not sustainable and must be redesigned in every respect,” Mr. Sefcovic said recently.

The E.U. meets 55 percent of its energy needs with imports.

One of five goals of an E.U. energy union is improving innovation to keep the E.U. at the forefront of sustainable technologies. More and more technological breakthroughs in this area are being achieved in countries outside Europe. None of the 10 leading solar companies in the world is from the E.U.

“We don’t want our energy dependence to lead to dependence in technology too,” the paper warned. Brussels is now developing a strategy to stop the trend.

 


Video: Germany’s transition to renewable energy.

 

That strategy includes making bigger investments in innovations which add the most value – and less investment in mature technologies. The writers of the paper call for “the destruction of old technologies and business models.” That is the only way that new business areas can emerge, they argue. Other recurrent themes are smartgrids, storage technologies, distance heating and cooling systems, wind energy and greater efficiency.

Innovation isn’t the only way the energy union will gain momentum.

According to the paper, Europe should rely more on gas fields in the Mediterranean in order to reduce its dependence on imports from Russia. Other measures include closing current gaps in infrastructure and increased production from renewable energies.

The writers of the paper call for particular attention to the construction industry to help lower energy use. About 90 percent of the buildings waste energy and more financial incentives are needed for renovation.

Those hoping for a major boost to the energy union plans may be disappointed.

“The Commission has raised great expectations, but it’s serving old wine in new bottles,” commented one person working for a major utility provider. At that provider, there was relief that the idea of an E.U.-wide gas-buying syndicate was off the table. The policy paper only included reference to exploring a mechanism that would enable countries to have the option during times of crisis to work together to improve the negotiating position with the suppliers.

In the future, in terms of energy policy, the European Commission aims to ensure that going it alone becomes a thing of the past.

 

Thomas Ludwig is a European Union correspondent for Handelsblatt. To contact the author: ludwig@handelsblatt.com

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