European Commission unveils strategy to create 'energy union'

Will Green is news editor of Supply Management
11 March 2015

The European Commission (EC) has announced a strategy to create an “energy union” across the EU to lower prices, increase security of supply and cut CO2 emissions.

The framework strategy adopted by the EC brings together measures to increase the interconnectedness of electricity systems between countries, reduce dependency on gas imports from countries such as Russia and cut CO2 emissions by 40 per cent from 1990 levels by 2030.

The strategy includes a target that by 2020 at least 10 per cent of each country’s electricity production capacity should be able to “cross borders”, through the laying of additional cables. This will enable a market to operate, lowering the risk of blackouts and reducing energy costs.

So far 12 countries, including the UK, Ireland and Italy, do not meet the 10 per cent target but the EC says by 2020 all but two, Spain and Cyprus, will achieve the target through existing projects. To achieve the target across the EU will cost around €40 billion.

The EC said integrated energy markets could save consumers between €12 and €40 billion each year.

The energy union, which builds on last year’s European Energy Security Strategy, also includes the development of a strategy for the use of liquefied natural gas and storage hubs with multiple suppliers in the Mediterranean and Central and Eastern Europe, to reduce the dependency of Baltic states on Russia.

The EC will also “assess options for voluntary demand aggregation for collective purchasing of gas during a crisis and where member states are dependent on a single supplier”.

The strategy also includes measures to promote renewable energy and cut CO2 emissions from vehicles.

The EC said: “The European energy system faces an ever more pressing need to ensure secure, sustainable, affordable and competitive energy for all citizens. Excessive dependence on a limited number of supply sources, especially for natural gas, leaves countries vulnerable to supply disruptions. We must reduce our dependence on fossil fuels and reduce greenhouse gas emissions, and the affordability of energy and the competitiveness of energy prices are of increasing concern to households and businesses.”

Jean-Claude Juncker, EC president, said "For too long, energy has been exempt from the fundamental freedoms of our union. Current events show the stakes, as many Europeans fear they may not have the energy needed to heat their homes. This is about Europe acting together, for the long term. I want the energy that underpins our economy to be resilient, reliable, secure and growingly renewable and sustainable."

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