Assessing The European Energy Security Green Paper Environmental Sciences
The Green Paper "Towards a secure, sustainable and competitive European energy network" (Nov. 13, 2008) forms part of the package released by the European Commission last November (the same week with the IEA's World Energy Outlook 2008). The core documents are the EU Energy Security and Solidarity Action Plan outlined in the Communication entitled An EU Energy Security and Solidarity Action Plan [COM/2008/781] as well as a number of supporting documents, and notably the Green Paper on energy networks that is the subject of the present study group.1
The Second Strategic Energy Review package aspires to address the issue of security of energy supply in the EU and to set out policy priorities in the field of energy for the next Commission. The strategy that in the Commission's wording sets a "forward-looking political agenda" focuses principally in setting a course of action towards meeting all three of the EU's "core energy objectives": Sustainability, Competitiveness and Security of Supply.2
The Strategy package encompasses a compendium of wide-ranging initiatives hoping to give a "new boost to energy security in Europe" by supporting the 20-20-20 climate change proposals: reducing greenhouse gas emissions by 20%, increasing the renewables' share in energy consumption to 20% (compared to 8.5% today) and improving energy efficiency by 20%, by 2020.3
Following the publication of Green Paper the Commission has launched a consultation to gather input for its further actions. The consultation is open till March 31, 2009.
2.1 The timing is notable. The corpus of the climate change - energy policy package4, can be viewed as part of the effort to consolidate EU positions before the UN Conference on the Framework Convention on Climate Change (Copenhagen, 7-18 December 2009), perhaps the most important event of the Post-Kyoto negotiations. 5
2.2 The challenges facing Europe's energy sector are immense. The world's energy system is at a crossroads. Current global trends in energy supply and consumption are environmentally, economically and socially unsustainable. 6 Ensuring energy security'a reliable supply of clean, affordable energy for EU citizens'implies a new outlook and broad, effective changes to energy policy. Issues such as CO2 emissions, price fluctuations and unstable markets are global problems and require a coordinated response. EU countries must act in mutual support (solidarity) to confront the serious challenges and work together towards achieving change at the international level.
2.3. The challenges to energy security in Europe are directly related to:
- Fossil-fuel-based energy systems, that weigh down on the extensive use of renewable sources biofuels and solar, wind and wave power.
- Poor energy efficiency and energy waste.
- Price increases with extreme short-term price fluctuations.
- Depletion of EU oil and gas reserves.
- The need to address/reduce energy-related pollution.
- Coordination issues, particularly regarding relations with energy suppliers outside the EU.
- Social and employment- related implications. This challenge, in contrast with the preceding points, is not acknowledged in the Review.
2.4. Reflecting widespread concern about the ability of Europe's energy networks to deliver the energy which Europe's citizens need, on 16 October 2008 the European Council called on the Commission to reinforce and complete critical infrastructures.7
3. OVERVIEW OF THE GREEN PAPER
3.1. To secure its energy future and create more suitable conditions for investments in renewable energy and decentralized generation, the EU is seeking to place more emphasis on its energy policy, notably in an energy network development policy fully in line with its climate and energy goals. Among the five areas on which the Action Plan focuses is promotion of infrastructure essential to the EU's energy needs.
3.2. The Green Paper on energy networks sets out a new EU approach to energy network development aimed at the following goals and objectives:
- Promoting public understanding and solidarity by improving the flow of information and communication with citizens on energy network issues;
- Achieving the 20-20-20 targets by a comprehensive strategy for the integration of renewables into the grid and the promotion of projects that carry power from resource-rich areas (for example, wind in coastal areas), by the promotion of new grid technologies for more efficient and flexible use of local energy sources, by Europe-wide offshore grids, and by the promotion of CO2 capture, transport and storage;
- Innovation and new technologies (a flexible European grid with ample storage capacities incorporating various sources of electricity production).
3.3. The development of infrastructure to transport electricity, gas, oil and other fuels plays a crucial role in achieving the EU's ambitious climate and energy goals. The aging European energy networks, based on traditional fossil fuel supply systems, face an increasing risk of network inability to deliver the energy from producers to consumers. Between now and 2030, it is estimated that up to 1 trillion Euros will have to be spent on the EU's electricity network and generation capacity, and 150 billion Euros on gas networks (excluding import pipelines from third countries).
3.4. European networks need to be modernized and to become more flexible, utilizing conventional and renewable sources of electricity production as well as incorporating intelligent energy technologies. New grid connections should link those EU countries that are insufficiently connected with other member states in order to guarantee them full participation in the internal energy market. This will fit in with the development of international energy networks - an important element of EU energy policy.
3.5. For the purpose of better promotion of new energy networks, the Commission identified six priority strategic projects: the Baltic Interconnection Plan, new Southern Gas Corridor, Liquefied Natural Gas, Mediterranean Energy Ring, North-South gas and electricity interconnections within Central and South-East Europe, and a Blueprint for North Sea offshore grid.
3.6 The Baltic Interconnection Plan, covering gas, electricity and storage, is aimed at connecting the Baltic region with other parts of the EU. The Commission agreed that the Baltic Interconnection Plan is necessary to achieve renewable energy objectives, to secure sustainable energy supplies, and to build up energy solidarity among countries of the Baltic Region and among other member states. According to the EU energy security and solidarity action plan, works on drawing up the Baltic Interconnection Plan will be handled by a High Level Group made up of members from the States most directly concerned.
3.7. For over 13 years the EU has been implementing its energy network policy mainly by the Trans European Networks for Energy (TEN-E) program.8 For greater effectiveness and to best meet today's energy challenges, TEN-E needs to be reviewed and updated. For that purpose the Commission proposes a number of measures such as increasing the TEN-E budget, extending the scope of TEN-E to the full energy supply network (for example, to oil pipelines), or market driven TEN E planning. There are also plans mooted to replace the existing TEN-E with the EU Energy Security and Infrastructure Instrument, which would aim to achieve all the European renewable energy objectives through assistance for infrastructure projects launched within the borders of the European Union and outside the member countries.
4. SOME CONSIDERATIONS ON NETWORK POLICY and TEN-E
(following some of the questions posed in the public consultation procedure)
4.1 The lack of a strong and well-financed public initiative on the basis of long-term plans can be considered as a serious barrier to the development of a European grid and gas network. Divergent conditions and circumstances among member states can also be obstructive. The EU should act directly on cross-border lines, and get involved in setting the goals for national and regional policies (i.e. requiring that grid policies are aimed at ensuring access to the grid for new renewable producers). Policy at the EU-level as well as at the regional and national level cannot be based on advice and solutions from established utilities.
4.2 Electrical grid design is a complex technical matter and relevant problems have to be anticipated into any pricing structure. Issues to be addressed include as a starting point, knowing what the current European grid looks like: How is it interconnected? How far into Africa and Asia does it extend? Is it synchronous throughout? What are the organizations responsible for maintaining frequency and voltage stability? What are the isolation policies when a segment fails? How does the existing pricing model account for demand changes? What is the market structure for the reactive power, and how are the technical problems related to the separation of generation from distribution handled?
A sophisticated system place to handle such issues has to be put in place and any realistic proposal to change the power grid marketplace would have to be evaluated and approved in the context of this existing system.
4.3. Regarding EU intervention in local planning disputes related to energy infrastructure and the action that the EU should take, it is advisable for the EU to get involved in local disputes in cases where stated EU goals would be adversely affected, e.g. the spread of renewables. Local planning disputes should become an EU matter when EU policies that have direct relevance towards planning are affected, (e.g. Natura 2000; EIA Directive), or if the planning dispute entails cross-border elements and relates to a TEN-E project. Local planning disputes should otherwise be the responsibility for the member states' governments to work out. It should also be made clear that such disputes cannot be legitimate grounds for failure by national governments to meet EU climate change ' energy targets such as a national renewable energy target.
4.4. When a local planning dispute threatens to delay a TEN-E project, the Commission should monitor and exert pressure on the concerned national government and try to elucidate the project to local communities. On the whole the EU should aim to anticipate and prevent local planning disputes by linking up impact assessments to involve local communities at an earlier stage in TEN projects. To that end, more funds should be allocated for IA in DG TREN.
4.5. Regarding the question on the need and the content for a more focused and structured approach to research and demonstration relating to European networks, it should be emphasized that research and demonstration projects should be targeted specifically towards the operation of a European electricity grid with a high share of renewable energy. This implies directing funds primarily towards storage, local generation and changes to the electricity grid. Obviously in the light of the ambitious targets set, the EU should strive to put in place a true European strategy for research and development as well as for public and private investment programmes focusing in renewable energy sources, energy efficiency technology to reduce emissions of greenhouse gas, hydrogen, carbon capture, hybrid cars etc.
4.6. As the most important activity for the EU in network development, it is possible to consider the rapid expansion of the TEN-E network through co-funding. Priority should be given to electricity networks. Funding for TEN should be enlarged through an increase in the general budget of the EU, possibly reallocating funds within the EU budget away from agriculture and fisheries, and utilising funds left over in the budget. Furthermore. a long-term programme for investment in energy production and grids, based on anticipated energy demand, national import and export capacity and interconnection capacity at EU level would be essential.
4.7. As regards the possibility of increased involvement of EU in facilitating infrastructure projects in third countries, it is advisable to limit facilitation of infrastructure investment in third countries to cases that bring that would potentially directly benefit the EU energy network. Priority should be given to electricity networks that transport renewable energy over gas and oil infrastructure. 9
4.8 Turning the TEN-E into an operational security of supply and solidarity instrument would surely get the EU more visibility, but it is not possible at this stage to decide whether the effect would be necessarily on the positive side. The conditions and circumstances should be clarified.
4.9. As to whether TEN-E be extended to oil infrastructure and also to new networks for CO2, biogas or other networks the reply should be in the affirmative. The fact that in the overall EU energy mix oil consumption accounts for 36 % of the EU's final energy consumption in conjunction with the depletion problems10 is not effectively reflected and addressed in the overall strategy. The significance of oil consumption in conjunction with the importance of the transport sector is a critical point that should be taken into account in the overall strategy and in developing networks. Measures to transform the transport sector to move away from dependency on oil should be a priority. It is difficult to understand how an energy policy can be successful, at this particular moment in time, without taking Transport as a central target of action.
5. ADDITIONAL REMARKS
On a final note, regarding measures beyond those mentioned in this Green Paper would help secure a sustainable infrastructure for the EU, it should be emphasized that :
5.1 Energy is a service of general interest. It plays an essential role in economic development, human dignity and the environment. This is why energy choices must be transparent, allowing for the active participation of citizens and democratic control. These conditions, however, are not being met in the liberalized market. The withdrawal of the state has opened the doors to powerful private oligopolies.
5.2. The market by itself cannot achieve the necessary transformation into a new energy epoch. As the Stern Review reminded us, climate change represents the biggest market failure in history.14 The very mechanisms that failed in the first place cannot be trusted to ensure an energy transition that would benefit society as a whole. Energy policy must permanently take into account the longer term stakes, which cannot be assured by the market alone:
- Combat global warming caused by the intensive use of fossil fuels, adapt to the unavoidable consequences of global warming and tackle the civil and military risks involved in the use of nuclear energy;
- Work toward supply self-sufficiency;
- Ensure equal access for all to energy services;
- Guarantee responsible management of resources that are being threatened with depletion or scarcity in the medium-term, such as oil, natural gas and uranium;
- Ensure economic development
5.3. There are wide ranging social aspects and implications but a clear recognition of the social aspects of the choices made is absent. Regrettably, employment related issues don't seem to be a concern of the whole climate change - energy strategy package. Concern has been expressed by the European Trade Union Confederation (ETUC) that welcomed the climate change package but regretted the lack of accompaniment measures for workers affected by the consequences. 11 A social dimension taking into account trade union and workers' rights and focusing on quality and training is essential for the success of the package. Europe's energy policy should contribute to a safe workplace and enable participation in the development of a strategy for secure and sustainable energy supply. The ETUC has also proposed to put in place a European low-carbon economy adaptation fund to accompany the climate change transition measures that affect workers and jobs.
5.4 Increased capacity for anticipation and active employment policies is essential. The economic and financial crisis as well as current challenges including the restructuring of the energy sector call for the reinforcement of workers' information and consultation rights and of social dialogue in the energy sector. These challenges imply also a vast scope for social dialogue and negotiations at every level, both territorial and in companies. Employment policies inevitably should take into account the need for controlling social transitions and for transparent financing. The ETUC has emphasized that a genuine social dialogue must get under way 12 and requested the creation of an advisory committee on energy and climate change.
1 See the Strategy's web page -http://www.managenergy.net/products/R1592.htm and http://ec.europa.eu/energy/strategies/2008/2008 11 ser2 en.htm
2 Presidency conclusions, European Council, March 2007
3 The first Strategic Energy Review (2007) as part of a wider communication on energy and climate, provided the framework for the development of the EU's '20-20-20' policy, a historic commitment set by member states in March 2007 and translated into the 'package' of energy and climate proposals presented by the EU executive on 23 January 2008.
4 See also COM(2009) 39 final: Towards a comprehensive climate change agreement in Copenhagen.
5 Talks that are generally part of the UN Framework Convention on Climate Change (UNFCCC), denoting the period after the first 'commitment period' of the Kyoto Protocol, due to expire at the end of 2012.
6 IAE World Energy Outlook 2008
7 Conclusions of the Presidency ' European Council Brussels , 15-16 October 2008)
8 See also - EU Commission report on the implementation of the trans-European energy networks programme in the period 2002-2006 (Communication COM(2008)770)
9 An example could be the DESERTEC Concept that is designed to bring deserts and existing technology into service to improve global security of energy, water and the climate. The largest, technically accessible source of energy on the planet by far is to be found in the deserts around the equatorial regions of the earth. http://www.desertec.org/
10 Europe imports 54%10 of its energy and relies on fossil fuels for about 85% of its energy and will have to address the imminent peak in liquid and gaseous fossil fuel. Oil and gas reserves are currently set to plateau and peak levels while the International Energy Agency (IEA) forecasts that by 2030 global energy demand will be 45% higher as compared to present demand. Oil and gas reserves in North America and Western Europe are in decline. While there are diverging views on when exactly global oil production will start decline, this will occur and will cause steep prices increases. According to the IEA 2008 Outlook lack of sufficient production to meet demand will likely contribute to a steep rebound in oil prices from present levels to hit an average of more than $100 a barrel between now and 2015 and $200 a barrel by 2030. The serious implications for the whole energy sector, starting from transport are not acknowledged and effectively in the Second Strategic Energy review.
11 ETUC Press release 15/12/2008
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