Brussels, 18/03/2014 (Agence Europe) - The European summit on 20 and 21 March will stress the importance of completing the single market in energy this year. The EU28 leaders will note the need for greater efforts to diversify the supply of energy in the light of the Ukrainian crisis and diplomatic tension with Russia.
The draft conclusions documents for the spring summit, which this newsletter has seen, has a chapter on energy, noting that the priority in this area is full integration of the single market in energy very soon and developing interconnections in order to end the energy isolation of a number of member states from the European gas and electricity grids by 2015. To this end, the EU28 will call for greater efforts to ensure effective, coherent implementation of the third legislative package for liberalisation of the gas and electricity markets. In order to ensure rapid implementation of all the measures needed to achieve the objective (which has been pending for more than a decade) of ensuring that at least 10% of electricity generation capacity in each member state is connected up with neighbouring member states' power grids. Particular attention should go to improving interconnection with peripheral and less connected areas of the single market and incorporating all member states into the EU power grids, along with neighbouring countries. The European summit will call for effective application by the member states of the EU market integration and energy efficiency rules, urging the Commission to threaten action against countries failing to comply.
In the light of current events and diplomatic tension with Russia, the EU's leading gas supplier (supplying more than half of the EU's non-EU gas supplies, most of which transits through Ukraine), the EU28 will note: “Efforts to reduce Europe's high gas energy dependency rates should be identified, especially for the most dependent member states. (…) The EU needs to accelerate further diversification of its energy supply, elaborate ways to increase its bargaining power, continue to use develop renewable and other indigenous energy sources and coordinate the development of the infrastructure to support this diversification in a sustainable manner. Implementation of infrastructure projects of common interest should be speeded up, and available EU resources, including the CEF, and the EIB financing capacity, should be swiftly mobilised in support of these objectives”.
In the light of concerns about industrial competitiveness, another key topic at the conference, the European summit conclusions document discusses at length the tricky matter of energy prices and costs. The EU28 will call for sustained efforts to be deployed to reduce the energy costs borne by end users, based on an analysis by the European Commission published in January (see EUROPE 10002) and comments by the European energy ministers on 4 March (see EUROPE 11032). There should be work, they say, to encourage gradual transition from renewable energy support mechanisms to a more cost-effective market-based solution and greater convergence of national aid schemes post-2020. This should be supported by sustainable investment in energy efficiency and demand management, along with making use where possible of electricity available in the single market rather than relying on home-generated electricity alone. These efforts should be based on promoting domestic resources and competition on the gas supply markets, along with examining the contractual link between gas and oil prices. Member states are left to decide on appropriate measures to reduce costs that best suit their own situation. The European summit will call for an in-depth examination of national practices for energy taxes and the cost of the energy grid, in order to reduce their negative repercussions on energy prices as much as possible. (EH)