Brussels, 09/03/2007 (Agence Europe) - As agreed at the European Council of December 2006, this week's European Council adopted a five-part action plan for energy for 2007-2009, as part of the EU's integrated approach to combatting climate change and guaranteeing the security of energy supplies. It based the action plan on the energy and climate change package unveiled by the European Commission on 10 January 2007 (see EUROPE 9341), endorsing no less than 17 of its recommendations.
Qualitative breakthrough in terms of boosting EU's capacity to tread new ground, says Merkel
After the Spring summit, German Chancellor and President of the European Council Angela Merkel said she was delighted that the EU had been able to open the door to a new dimension in European cooperation over energy and climate change, describing it as a qualitative breakthrough which would boost the EU's capacity to innovate. She particularly highlighted the agreement struck by Europe's leaders on a mandatory target for renewable energy, which had been the main stumbling block at the summit. She said there had been much discussion but the politicians had agreed on the importance of having an innovative technological option made possible in Europe. Merkel noted that it would be necessary to start from where member states were currently, because national traditions differed and it was necessary to study the situation in each country. She said the European Commission would have to get down to the difficult task of deciding how much each country will contribute to the target. Merkel stressed that the political will existed and the EU had agreed on the necessity of taking a new path and making a qualitative shift. The EU has demonstrated its capacity to act, she said.
Five priority action areas
Internal energy market. The European Council started by looking at measures to ensure the smooth functioning of the internal gas and electricity markets and the introduction of a better connected and more integrated market. It backed the European Commission's idea of appointing coordinators for four priority projects of European interest.
Recognising that there is not yet a genuinely competitive, harmonised and inter-connected European energy market providing real benefits to European consumers and boosting security of supply, EU heads of state and government stressed the need for full implementation, respecting both the spirit and the letter of the law, of existing legislation on opening gas and electricity markets to boost competition, ensure effective and safe regulation and encourage investment in the single energy market to the benefit of customers.
Stressing the need for an investment-friendly regulatory framework, the Council urged the Commission to draw up measures that take the characteristics of the gas and electricity markets into account, along with national and regional markets, by developing existing legislation where possible to unbundle production and distribution where appropriate. This would be based on independent, appropriately regulated, management networks, ensuring free and fair access to transport infrastructure and independent decision-making on investment in infrastructures. In this connection, the European Council stuck closely to the deal reached at the Energy Council on 15 February 2007 (see EUROPE 9367) which did not mention the two options suggested by the European Commission to introduce unbundling, namely ownership unbundling and the ISO+ idea.
Accepting all these proposals for bringing about greater integration of the single market, the European Council also endorsed the idea of the European Commission preparing measures to ensure greater harmonisation of powers and greater independence of national energy regulators, and a new independent mechanism to enable national energy watchdogs to work together and decide on important cross-border issues (the Commission's ERGEG+ proposal). The EU27 agreed to set up a new EU mechanism for transport network managers to ensure better coordination and safety of network operations, along with a more integrated system for the cross-border trade in electricity and operating the electricity distribution network (including the drawing up of technical standards). Another notable area of progress was the European Council's acceptance of the Commission's idea of a new Customer Energy Charter to the benefit of consumers.
The European Council urged the Commission, ahead of the June 2007 Energy Council, to clarify key measures under consideration and their impact, to determine how much additional investment would be required to meet the EU's strategic needs, to assess the impact of vertically integrated non-EU energy companies on the common market, to study how to introduce reciprocity, and to assess access to gas storage facilities in the EU.
Reasserting the need for improvements in regional cross-border trade, boosting regional energy cooperation and accelerating the integration of regional energy markets through greater inter-connection capacity, taking account of the integration of renewable land and marine energy sources, the European Council endorsed the European Commission's idea of appointing coordinators, where necessary, to ensure progress is made in the most critical priority projects of European interest (the high speed rail link between Germany, Poland and Lithuania; connecting up marine wind farms in southern Europe; connecting up the electricity networks of France and Spain; and the Nabucco gas pipeline). The European Council repeated its call for member states to increase interconnection capacity to at least 10% of installed gas and electricity capacity by 2010.
Security of supply and solidarity mechanisms. To boost security of energy supplies in a spirit of solidarity among member states, particularly in the event of energy crises, the European Council reaffirmed the importance of genuine diversification of energy sources and supply routes. In this connection, it recommended introducing more effective mechanisms for reacting to crisis and looking at a wider range of possibilities, remembering that it is the member states which have prime responsibility for national energy demands. The European Council wants the mechanisms to make appropriate use of early warning system potential in the network of energy supply correspondents. Politicians also recommended greater openness about hydrocarbons and a re-assessment of oil supply infrastructures and the EU's oil storage mechanisms to supplement the International Association of Electrical Contractors' crisis mechanisms. EU heads of state endorsed the idea of the Commission carrying out a detailed analysis of the availability and costs of gas storage installations in the EU, and the setting up of an energy monitoring unit at the European Commission.
International energy policy. The European Council's action plan gives clear guidelines to ensure the EU has an effective international energy policy and speaks with one voice. This common approach is based on greater dialogue and partnership among energy importing and energy producing and transit countries. In terms of energy producer and/or transit countries, the EU27 focussed on Russia (negotiating and finalising a new partnership and cooperation agreement with a section on 'energy relations'); Central Asia and the Caspian Sea and Black Sea regions; Algeria; Egypt and other oil producing countries in the Middle East and North Africa. In terms of partnership with energy importing countries, the European Council stressed the importance of stepping up dialogue with the United States and emerging economies (particularly Brazil, China and India) and setting up dialogue with Africa. The EU27 noted that it would be necessary to extend the treaty establishing the Energy Community to include Norway, Moldova, Turkey and Ukraine.
Energy efficiency and renewable energy. The European Council decided to adopt ambitious and specific targets for energy efficiency, renewable energy and biofuels, noting that they would have to be met by ensuring that the share of efforts and benefits was fairly divided among all member states, taking account of the different starting points and potentials of the different countries.
The EU27 started by agreeing to adopt an energy efficiency target to ensure energy savings of 20% of the projected EU energy consumption levels for 2020. This will require the full introduction of the five priorities defined by the November 2006 Energy Council, namely energy efficiency in transport, introducing minimum energy performance standards for consumer electrical equipment; raising energy consumers' awareness of energy-efficient behaviour, developing new energy technologies and ensuring better energy efficiency in buildings. Through a series of last-minute amendments, the European Council instructed the European Commission to prepare legislation to beef up energy efficiency rules for office and street lighting by 2008 and for household lighting systems (lightbulbs) by 2009. The EU27 also instructed the Commission to draw up a draft international energy efficiency agreement this year. On the request of Luxembourg, the European Council called for a re-assessment of the EU rules on state aid for environmental protection and other EU legislation that could be used as incentives for making energy savings.
In order to send a clear signal to industry, investors, innovators and researchers, the European Council adopted ambitious targets for renewables, namely a mandatory target of renewables accounting for 20% of total EU energy consumption by 2020; a mandatory 10% target for biofuels in total oil and diesel consumption for transport in the EU by 2020 as long as the biofuels are produced sustainably, that second generation biofuels are put on the market, and the fuel quality directive is amended to foresee suitable levels of fuel mixing.
The 27 members also agreed that, on the basis of the general objective adopted for renewables, “differentiated national overall targets” should be set “with due regard to a fair and adequate allocation taking account of different national starting points” including the current level of renewables and energy mixes, and as long as the minimum biofuel threshold is reached in all member states, leaving it up to the latter to fix national targets for each specific sector concerned by renewables (electricity, heating and cooling, biofuels). To reach these targets, the European Council recommends a coherent overall framework established on the basis of a proposal for a new overall directive on the use of all renewable energy sources, that the Commission is invited to present in 2007. The proposal should above all comprise provisions concerning the overall national targets of member states, national action plans with sector-specific objectives and measures to be taken as well as provisions aimed at ensuring sustainable bio-energy production and use, and avoiding disagreement linked to the various uses of biomass. At the request of Luxembourg, the European Council also invited the Commission to analyse the potential represented by crossborder synergies and interconnections to reach the global target for renewables, also taking into account the situation of countries and regions that are isolated from the internal energy market. Finally the 27 participants envisaged setting up a forum allowing closer Commission/member state collaboration for the development of renewable energies.
Low carbon content energy technologies: Finally, the European Council action plan recommends the development of a European strategy plan for energy technologies with a two-fold aim: - to strengthen energy R&D to ensure swifter competitiveness of sustainable energies (mainly renewables) and low carbon emission technologies and to speed up the fine-tuning of technologies with good energy output. The Commission will present its plan this year so that it may be examined by the 2008 Spring European Council.
The 27 members of the EU above all stress the importance of moving forward in the field of clean combustion techniques and clean energy production, strengthening research and development in the field of CO2 capture and storage technologies, and defining a technical, economic and regulatory framework so that these techniques may be put on the market by 2020. Finally, it supports the Commission's development of a mechanism aimed at stimulating the construction and exploitation, by 2015, of about a dozen installations for the demonstration of sustainable technologies for the use of fossil fuels for electricity generation.
A paragraph is obviously devoted to nuclear energy: although the 27 members welcome the assessment made by the Commission of the contribution that this kind of energy will make to climate change, they confirm that, given the fact that member states are free to choose their energy mix, it is up to each and every one of them to decide whether they wish to use the nuclear energy solution or not, recalling that this decision requires continued and improved nuclear safety and the management of radio-active waste. To this end, the European Council has endorsed the creation of a high level group on nuclear safety and nuclear waste management. Finally, at the request of the Czech Republic, the European Council called for a broad debate to be held between all parties concerned on the possibilities and risks inherent to nuclear energy.
Follow-up to the action plan: - The action plan will undergo regular assessment in the context of an annual examination by the European Council. Early 2009, the Commission is expected to present an update on the strategic energy policy analysis, which will be the basis for the next action plan that the Council will adopt in spring 2010.
Twenty-Seven welcome this historic step
French President Jacques Chirac, speaking at his last European Council, welcomed the results of the summit. “As renewables are only a part of the answer [to climate change] and are not enough to reach the CO2 emission reduction targets, we have insisted that they be replaced in the broader framework of non-carbon energies”, he added. The leader of the Italian government, Romano Prodi, welcomed a somewhat “unexpected” agreement on a “new major target for Europe which will correspond to an in-depth change in Italy's industrial policy”. “European countries historically have been able to focus on long-term objectives to combat climate change”, Swedish Prime Minister Fredrik Reinfeldt said. “We have managed to place emphasis not only on the climate aspect but also on that of energy solidarity”, Polish President Lech Kaczynski was pleased to state, before adding: “The German presidency worked on the premise of the binding and non-indicative nature of the target for renewables. Poland supported this premise as it wanted the summit to end successfully”. “On the point of clean energies, Spain supported the adoption of demanding measures for renewables”, stressed Spanish Prime Minister José Luis Zapatero, assuring that “under Spanish Presidency in 2010, Madrid will launch a second and even more ambitious energy plan”. Luxembourg Prime Minister Jean-Claude Juncker described the binding target for renewables as a “breakthrough”. Nuclear energy has made a small comeback on the European scene but not in the way that some might have hoped. The nuclear option must not be made into the cure-all for resolving all climate change problems”, Juncker added. (eh).