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Securing Europe’s energy supply

Submitted by on 30 Nov 2010 – 15:26

By Günther H. Oettinger, European Commissioner for Energy

Energy is the heart of our economy and our society. If we invest in our energy system, we are investing in the future. If, however, we neglect our energy supply and energy efficiency, the consequences could be profound and irreversible. In this respect, our plans regarding energy technology and infrastructure are crucial.
The market has to guarantee our energy supply. But the proper regulatory framework is vital for the functioning of the energy market. The third package on the internal energy market has created this new framework at EU level. However, energy supply and technology developments are not just closely linked to our daily life but also to major geopolitical events in the world. Political signals have a direct influence on the decisions of the energy industry.
The need to invest in new energy infrastructure, technologies and sources of energy is enormous. It is estimated that by 2030 up to one trillion euros will have to be invested in the European electricity grids and electricity generation and 150 billion euros in the gas network, excluding import pipelines from third countries.
As the European Commission’s new Energy Commissioner, I can confirm that in recent years the EU has succeeded in developing a comprehensive European energy policy. This was a process that was pursued jointly and ambitiously by the Member States (and the German Länder in particular), the industry and the European Institutions.
The EU’s energy policy sets out clear requirements and targets for sustainable, competitive and secure energy. Our main aims are to achieve a 20% reduction in greenhouse gases, to provide EU consumers with a supply that includes a 20% share sourced from renewable energies and a 20% improvement in energy efficiency by 2020.
In order to send the right signals to the energy market, we must now begin laying the foundations for a more sustainable Europe. My first priority as Energy Commissioner is to implement the new European regulatory framework promptly and properly. This will also considerably improve the conditions for the security of our energy supply. We must also, however, work together with the Member States and the European Parliament to develop European measures to foster new energy networks and innovations and improve the investment climate. The challenge for us is to attain a low-carbon economy, with the ultimate objective of achieving emission-free energy generation and transport sectors.
I would like to specifically highlight three topics that are of fundamental importance for the proper functioning of the internal market in energy and our future energy supply, namely technology, infrastructure and finances.

Infrastructure

Infrastructure is the circulatory system of the internal market in energy. It is intrinsically linked to the security of the energy supply. It is vital for a successful decarbonisation policy, which requires adjusting the network to more renewable and decentral production.

Technology
We must develop a new generation of technologies with regard to achieving the ’20-20-20′ goals and a C02-free energy sector by 2050. Even if some of these technologies cannot be used in the medium term, it is very important to launch them as soon as possible. It often takes decades before new technologies become established and achieve a significant market presence.

Finances

Strategic goals and political commitment alone will not build any infrastructures or place any new technologies on the market. Money is needed for that, but times of both national and EU budgetary constraints are a significant obstacle. The International Atomic Energy Agency has established that following the financial and economic crisis, in 2009 investments in the oil and gas infrastructure decreased by around 21% worldwide in comparison with the previous year. This means that the amount globally invested fell by around 100 billion US dollars (83 billion euros).

New European Energy Infrastructure Instrument
We can also use the experience from the economic recovery package for the development of the new infrastructure package requested by the European Council.

Nuclear energy
We note a growing increase in nuclear energy worldwide. Around 60 States have asked the International Atomic Energy Agency for help in developing this technology. Within the EU, most countries already use nuclear energy. Other Member States are taking concrete steps to start nuclear energy programmes, resume them or develop them further.

Ambitious but realistic
Our vision of achieving a carbon-free energy and transport system by 2050 is indeed ambitious but entirely realistic. Besides a considerable increase in energy efficiency, we want to produce electricity exclusively from sources with the lowest possible CO2 emissions. We are talking about a future energy mix produced predominantly from renewable and nuclear sources, but also fossil fuels with carbon capture and storage.
For these reasons, the EU must above all create the necessary energy policy stimuli and incentives for investment to boost investments in infrastructure, technology and energy efficiency. Smart grids and networks and alternative fuels will play a major role in this regard. Ultimately it comes down to the energy mix and market players’ behaviour.
The internal market in energy, energy supply security, energy efficiency, renewable energies, infrastructure and low-emission energy networks for tomorrow: these are the main issues for Europe’s energy policy. Together with the development of an external European policy for energy, they are also my priorities as Energy Commissioner for the coming years.