New chapter in European energy policy

The conclusions of the European Council’s meeting, call for great efforts to modernise and expand the EU’s energy infrastructure, and to connect member state networks. Heads of state and government believe that the EU should have a single gas and electricity market by 2014.

The summit called on member states, to fully-implement the laws on the establishment of the integrated internal energy market in a timely manner. The adopted document calls on the Council and the European Parliament to adopt the Commission’s proposal, for the regulation of energy market integrity and transparency as soon as possible. Member states have to work faster, if they are to adopt the technical standards of electric car charging systems, by mid-2011 and smarter networks and meters by 2012.

The European Council declared that no member state be cut-off from the European gas and electricity networks, or be exposed to endangered energy supplies, after 2015. According to the summit’s conclusions, the investment cost of infrastructure, should be covered by markets fees.

The Hungarian Presidency’s plans

The Hungarian Presidency is ambitious, to see the energy strategy and infrastructure objectives proposed by the European Commission until 2020, be adopted as early as 28 February, at the meeting of energy ministers. The Energy Roadmap 2050, will be discussed by an informal ministerial meeting in May. While the New EU Energy Savings Plan, can be adopted by the European Council’s meeting in June. In order to prepare the legislative proposal on financing energy infrastructures, it needs to be-submitted by the Commission, in the second half of 2011, Budapest will host a high-profile conference in the subject. These issues were included in Prime Minister Viktor Orbán’s speech in the European Council’s meeting.

Creating Europe’s internal energy market

The Hungarian Presidency wants Europe to take on new dimensions in the field of energy policy, and to open the way to clean energy, which is affordable and available in the long run. Energy policy has to contribute to economic growth, the fight against climate change, and the reduction of dependence on outside energy resources. The most pressing task, is to create Europe’s internal energy market and reduce the fragmentation of Europe’s energy infrastructure.

North-South Energy Connection

For Hungary it is strategically important to establish a North-South connection between the Baltic, the Adriatic and the Black Sea; which is in addition to the currently dominant East-West energy connections. This was Hungary’s purpose, by commissioning the Hungarian-Romanian and Hungarian-Croatian gas connection pipeline, at the end of 2010 and by concluding an inter-governmental agreement on the construction of a similar Hungarian-Slovakian pipeline, on 28 January 2011. The North-South energy connection was discussed by the heads of the four Visegrád countries, Bulgaria and Romania with José Manuel Barroso, President of the European Commission, at a business dinner, on 3 February.

The European Council’s session was prepared by the Energy Council’s meeting, in December 2010. During the relevant debate, the attendees reached an agreement on matters such as energy efficiency in buildings and transport, the development of renewable energy sources, and the implementation of the third liberalisation package, aimed at a full-scale internal energy market. The ministers supported the earliest implementation of the missing network connections, the establishment of infrastructure developments of a European level priority, and the enhancement of cooperation with third countries. Member states continue to discuss the harmonisation of renewable energy support systems, and the financing of energy infrastructure development.

Steadily rising dependence

With 500 million citizens and 20 million enterprises, the EU is considered the world’s largest energy market. Since energy is a key issue within the Union, the Treaty of Lisbon also contains such objectives, from energy supply security through efficiency to renewable sources. At present, renewable energies constitute a mere 16 percent in the Union’s own energy production, while oil (14.2 percent) and natural gas (19.5 per cent), are still dominant. Energy generated in EU member states, does not remotely cover the needs. The EU’s import dependence is on the increase. In 2006, 54 per cent of energy consumption was sourced from import, and this share may rise to 70 percent by 2030, according to estimates. The majority of Europe’s energy import is made-up of oil (60 percent) and natural gas (26 percent).

Energy 2020 infrastructure priorities

The European Commission adopted the Energy 2020 Strategy on competitive, sustainable and secure energy supply and energy consumption in November 2010. The document outlines the EU’s fundamental energy policy principles and directions of development, along with the tools required for implementation. According to the ambitious objectives of the Energy 2020 Strategy, member states will emit 20 percent less greenhouse gases in 2020 than in 1990, and raise the ratio of renewable energies by 20 percent, while decreasing energy consumption in the EU by a total of 20 percent through the enhancement of efficiency.

In November 2010, the Commission adopted the document “Energy infrastructure priorities for 2020 and beyond”, which specifies the improvement and upgrading of power lines, natural gas and oil pipelines in the EU. In March, the Commission will publish the roadmap on the transition to a low carbon economy, to be implemented by 2050.