Brussels, 21/05/2013 (Agence Europe) - On Wednesday 22 May 2013, Europe's leaders will for the first time discuss the thorny question of high fuel prices and their consequences for the competitiveness of the struggling European economy which is finding it difficult to generate healthy growth. They will also touch on the controversial issues of climate change and the exploitation of shale gas.
What should be done at EU level to boost energy efficiency, develop sources of energy within Europe and establish a more predictable energy policy as a prerequisite for attracting the investment needed to update the EU's energy infrastructure? These are the questions formulated by the president of the European Council, Herman Van Rompuy, for the European Union heads of state or glovernment, who will be meeting in Brussels on Wednesday to discuss two issues that he said were crucial for the economy and for social cohesion in Europe, namely energy and taxation.
As in his letter of 8 May to the EU27 leaders, the president of the Commission, José Manuel Barroso, told the European Parliament on Tuesday 23 May about the dangers of a fragmented European energy market and called on member states to take action as a matter of urgency to avoid this and to enable the EU to become more energy efficiency, invest more in energy infrastructure and smart networks and meters, using green energy in a more profitable manner and diversifying the sources of fuel from outside the EU. Van Rompuy said these were the policy priorities he would be calling for on Wednesday.
The United States is about to become a net gas exporter rather than importer thanks to the discovery of shale gas, but the EU is still dependent on oil and gas imports, which will rise by nearly 80% by 2035. Last year, gas prices for industry were four times lower in the United States than in the EU and electricity prices in the EU are almost double those in the United States. The president of the European Commission said that, above all, it was a question of energy security and European competitiveness, and the situation becoming more problematic for European citizens, too, because fuel bills are going up and low-income households are the worst hit. We must therefore talk about social equity too, said Barroso.
The Commission expects heads of state or government at Wednesday's summit to give a clear political message about Europeanising energy policy, explained EU Energy Commissioner Günther Oettinger in several newspapers around the world. For the first time, the leaders will discuss not only security and greening of the energy supply, but also its price in an over-fragmented market. The Commission hopes that the summit will take a clear line on the use of new indigenous energy sources, like unconventional sources of gas and the controversial shale gas.
Most importantly, the Commission will point out the need for a properly operational Single Energy Market that is interconnected and integrated. It will insist on the urgent need to complete transposition of the third package of measures to liberalise the Internal Energy Market, and urgent future measures to facilitate public and private investment in cross-border energy infrastructure while continuing to boost diversification of supply.
Warning from big energy companies
Headed by France's GDF Suez, Germany's EON and RWE, Spain's Iberdrola and Italy's GasNatural Fenosa and ENI warn the EU that failure in energy policy has led to destruction of the industry. The head of GDP Suez, Gerard Mestrallet, said in an interview with Le Monde newspaper that the companies were not calling for subsidies, but for visibility, stable and homogenous rules in Europe and quantified objectives until 2030 in terms of fighting climate change. He said a redefinition of energy policy was required as a matter of urgency, along with the policy's ambitions and resources, criticising a “Balkanisation” of European when it comes to energy and “failure” on the three targets laid down, namely mitigating the impact of climate change, improving competitiveness and energy security. Along with the failure of the carbon market, Mestrallet criticises the way gas power stations are stopped for three out of four days, although highly polluting coal power stations are working flat-out due to the fall in US oil prices due to the arrival of shale gas on the transatlantic market. He was also critical of state aid for renewable energy that simply adds to the overcapacity. He added that the risk of a blackout has never been as great as it is now due to the fact that gas power stations are not competitive and the intermittent nature of wind and solar power. (EH/transl.fl)