EU Energy Policy Blog

There is little disagreement that, with a few exceptions, renewable energy technologies tend to be more expensive than conventional options, especially considering their intermittent and unpredictable nature, which often requires backup generation or storage. Their main selling point is that they are non- or significantly less polluting. Renewables gain comparative advantage if a price were put on greenhouse gas emissions. This has always been among the main arguments for providing subsidies and encouraging their growth.
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The European Union is wracked by sovereign debt, budget deficits, monetary weakness, slow economic growth, trade deficits with the Emerging economies, an ageing population, and mass unemployment – but it has the supposedly proud role of world leader in Green Energy Transition. The main goal of this is reducing dependence on fossil fuels and increasing dependence on new, renewable, unconventional, alternate and “low carbon green” energy sources and systems, and improving energy efficiency, conserving energy and rationalising the energy economy.
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China may not be where cutting edge research takes place or innovative technologies emerge, and Chinese manufacturers are not usually the first to develop and market new products. But once they identify a product as globally marketable, Chinese manufacturers typically copy and apply reverse engineering techniques and then undercut their Western competitors in their own markets. With substantially lower wages, they can be fierce competitors. This pattern is repeated to one product after another, and in one market after another. A recent example is the market for utility-scale wind turbines where China has made impressive progress in the last few years.
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The European Union is engaged in a process of market inte- gration over a long period. Cross-border energy infrastructure investments should play a key role in reaching this objective. However, cross-border investment projects having a European interest are currently undertaken only country by country with an insufficient cooperation between actors involved in such a project. Beside the lack of cooperation, the asymmetries of cost allocation and of benefit distribution of cross-border infrastructure plus the presence of economic externalities have lead to a suboptimal situation at the EU level. Continue reading »

In the current context, where public budgets are overstretched due to the economic crisis, there is a pressing need to understand the fiscal implications of climate policies. Decarbonization will impact both sides of a country’s budget via changes in the tax levels and composition of taxes on the one hand, as well as transfer payments and direct investments on the other. Climate policies increasing public revenues could help to reduce state debt, while policies significantly increasing public expenses could be difficult to implement.
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On 22 June 2011, a proposal for increased Energy Efficiency was presented by the European Commission. The energy efficiency directive was intensely negotiated and faced strong internal opposition from a number of players. DG Climate officials have shared their concerns with the public.
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The discussion on a target model for European gas network access has been going on for a while now,officially starting with the conclusion of the 18th Madrid Forum in 2010 which invited ““the Commission and the regulators to explore, in close cooperation with system operators and other stakeholders, the interaction and interdependence of all relevant areas for network codes and to initiate a process establishing a gas market target model””.
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A few years ago I had the good fortune to participate in a European Commission sixth Framework Programme project Coordinating Energy Security in Supply Activities or ‘CESSA’ for short. This project culminated in a book published by Routledge in 2010 entitled: Security of Energy Supply in Europe: Natural Gas, Nuclear, and Hydrogen. I was very pleased to be an editor of that book and to be the author of chapter 8 entitled: Nuclear Energy in the Enlarged European Union. Continue reading »

The international oil markets have been quite turbulent for the past several months. The wave of protests sweeping the Arab world and the loss of Libyan sweet crude have fueled fears of shortages and have driven oil prices higher. Last week, on June 23, the western industrialized countries therefore decided to play their trump card: the strategic oil reserves. Over the course of the coming month, 60 million barrels of oil will be released onto the market from the emergency supplies of the United States, Japan and some European countries.
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Several EU member states are already taking their first steps on the path towards 2050. The Danish, German, and Irish governments have explored the policy options but the resulting strategies have not yet been legislated. In Finland, France, and the UK, a legal commitment has already been reached. The UK is the only member state that has reached the implementation stage of its legally binding 2050 strategy.
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