New Commissioner Lays Out Plans For European ‘Energy Union’

By David Dalton
14 November 2014

14 Nov (NucNet): Momentum is building for a European Energy Union like never before, but if progress is to be made member states will need to stop thinking of markets as national territories and be willing to explore the common buying of gas, the new European Commissioner for Energy Union has said.

In a speech at the Tatra Summit in Slovakia yesterday, Maroš Šefčovič laid out his vision for an Energy Union – an idea that was first aired in 2009 – saying it needs to be built on “security, solidarity and trust”.

“We need to integrate,” he said. “We need to explore the common purchasing of gas. We will need to diversify our energy sources and routes, and reduce high energy dependency on several of our member states.”

He said geopolitical events – notably in Ukraine and Russia – worldwide energy competition and the impact of climate change are triggering a “mind switch” in terms of the EU’s energy and climate strategy.

Mr Šefčovič, who supported the European Commission’s decision to approve a contract for the proposed Hinkley Point C nuclear plant in the UK, said transparency is needed as to how member states are negotiating with third country suppliers. The EC should be involved in these negotiations. Similarly, no member state should modify its energy system without consultation because this may have “huge consequences” for another member state’s systems.

Building a European Energy Union is one of the EC’s most pressing challenges, he said. The EU imports 53 percent of its energy at a cost of more than €400 billion a year, making it the biggest energy customer in the world.

Mr Šefčovič said one of his key goals is to finalise an internal energy market. He said a “transparent and competitive” energy market will be the backbone of the Energy Union, bringing real benefits to households through affordable energy prices and industry through greater competitiveness.

In a progress report on the internal energy market published last month, the EC said there are still challenges that need to be addressed.

The report said more investment is needed in infrastructure including smart grids. It said Europe needs to implement a set of simple, harmonised rules for gas and electricity trading.

Mr Šefčovič said the Third Energy Package – a legislative package that entered into force in 2009 aimed at producing a more harmonised internal gas and electricity market – must be “fully implemented and applied” through strict monitoring and with assistance for any member states experiencing problems with implementation.

The package includes measures such as the ‘Unbundling Provision’, which says organisations involved in electricity and gas transmission cannot also be involved in generation and supply. The aim of the legislation is to eliminate any potential conflict of interest.

Mr Šefčovič intends to produce a short policy paper within months with concrete proposals for an Energy Union.

The idea of a European Energy Union dates to a December 2009 declaration by Jerzy Buzek, president of the European Parliament at the time, who said a “European Energy Community” could become the next big EU project.

In May 2010, Mr Buzek signed a declaration which explained the concept of energy community and called for “a radical shift” in the way Europe produces and consumes energy.

One of his proposals was that the EU must have the ability to pool its supply capacities and engage in “coordinated energy purchasing”. In the long term, if the EU is faced with a major energy crisis, common strategic reserves must be available.

In September, when he was still prime minister of Poland, the new EC president Donald Tusk urged other EU leaders to create an Energy Union in order to reduce Europe’s dependence upon Russian gas imports.

Poland has decided to build new nuclear reactors to move away from its heavy reliance on coal and gas. The first unit is expected to come into commercial operation by 2025.

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