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. Last Updated: 07/27/2016

Europeans Seek One Voice on Energy

Presenting a sweeping new energy policy Wednesday, the European Commission urged member states to stand united before external energy providers such as Russia as a way to ensure the security of supplies and competitive prices.

The common policy should seek to lessen dependence on Russia and seek alternative suppliers, commission president Jose Manuel Barroso said in presenting the strategy, titled "An Energy Policy For Europe."

Russia's standoff with Belarus over oil transit -- which has disrupted supplies to five European countries since Monday -- was one of the reasons that "have given real meaning for millions of our citizens about our energy independence," he told reporters in Brussels.

"The cut in oil supplies from Russia is unacceptable," he said, according to a transcript provided by the EC. "The European Union must ... actively develop a common external energy policy to increasingly 'speak with one voice' with third countries."

The policy plan, however, described relations with Russia as "effective."

An EU priority is to negotiate a new comprehensive agreement with Russia that would include an energy partnership benefiting both sides and create the conditions necessary for new investments, the strategy paper said.

On top of Russia, the EU's energy supplies come from Algeria and member state Norway.

Other ways to achieve greater energy security would be to foster a more competitive EU energy market, to increase energy efficiency and to develop renewable energy, the paper said.

If the European Council approves the plan at a March session, member countries will have to take steps to achieve its targets.

In order to speak with one voice, the national governments should create a common internal energy market, Barroso said.

As a sign of progress, the number of cross-border energy mergers within the European Commission's jurisdiction reached 22 in 2006, tripling compared with 2005, he said.

The policy paper also focused on the reduction of greenhouse gases.

EU Energy Commissioner Andris Piebalgs said it was essential to change EU energy policy. "If we do not act, by 2030 we would be using more energy, importing more oil and gas from Russia and OPEC, and emitting more CO2 than today," he told reporters in Brussels, according to an EU transcript.

Last year's gas supply disruption from Russia over a pricing dispute with Ukraine was a "wake-up call" for the EU, said Britta Thomsen, vice chairwoman of the European Parliament's Industry, Research and Energy Committee.

"We would like to buy from Russia, but we've become aware that we need to diversify supplies and commercial partners," she said by telephone from Brussels. "It has become dangerous to be too dependent."

France and Germany are impeding creation of a common energy market because their electricity grids still belong to energy generators, Thomsen said.

Such a market would imply equal prices for energy resources to any EU country and the free exchange of electricity, a prospect that is too far away, said Christian Egenhofer, a senior energy researcher at the Center for European Policy Studies, a think tank.

"This idea of speaking with one voice is a joke," Egenhofer said from Brussels. "Interests are so much different for Germany, Spain and other countries."

As evidence that the current situation will last for many more years, he pointed out that Germany's E.ON and Italy's Eni had struck bilateral deals with Gazprom for gas supplies.

Russia's role as a major European energy supplier will not change dramatically in the next several years, agreed Yaroslav Lisovolik, chief economist at Deutche UFG.

If European consumption growth slows down, Russia could shift some of its oil and gas exports to Asia, Lisovolik said.

Russia should react to the European plans by re-establishing its record as a reliable partner for the EU as it goes through its pricing disputes with former Soviet neighbors, he said.

Highlights of EU Energy Strategy



Greenhouse Gas Emissions

The European Commission proposed a unilateral target of cutting EU greenhouse gas emissions by at least 20 percent by 2020 from 1990 levels.

Renewable Energy Sources

The plan puts forward a binding target of producing 20 percent of EU energy needs -- including power generation and biofuels -- from renewable sources by 2020, up from about 7 percent now.

Biofuels

Biofuels, produced largely from crops and which produce few emissions, should account for at least 10 percent of vehicle fuel in the EU by 2020.

Energy Efficiency

Brussels reiterated a previous target of improving energy efficiency by 20 percent by 2020.

Competition

The commission stated its preference for requiring utilities that generate power to sell off distribution assets as the most effective way to making the sector more competitive and help drive down prices.

Energy Diplomacy

The EU should speak with one voice when negotiating with energy producers such as Russia, Norway and Algeria as competition for resources intensifies.

Interconnections

Among other measures, Brussels proposed four coordinators to advance the most important projects:

links between Germany, Poland and Lithuania

links to offshore wind power sites in Northern Europe

electricity interconnections between France and Spain

the Nabucco pipeline between the Caspian region and central Europe.

Source: Reuters