Future EU Energy Strategy

The European Commission has launched a large consultation on the future of the EU’s energy policy for 2011-2020. The Commission intends to come forward with a stronger energy policy by presenting a medium-term strategy in an Action Plan on Energy Policy for 2011-2020 and a longer term vision through a Roadmap towards low-carbon energy by 2050.

To engage all relevant stakeholders but also citizens and Member States in this process, the Commission has launched a consultation on the basis of a stock taking document on the future EU energy policy. This document was presented by the Commission on 07 May 2010 and initiates a consultation process that will last until 02 July 2010.

Taking Stock of EU Energy Policy

Although many initiatives have been adopted in the energy field following the previous Second Strategic Energy Review, adopted by the Commission in 2008, the implementation of energy policy at EU level remains very poor. According to the stock taking document, this has consequences on the functioning of the internal energy market and therefore security of supply. The document also points out the lack of a European infrastructure framework and the insufficient use of the energy savings potential. The coordination of the EU's external energy policy remains weak. The document deems that innovation and R&D must receive more political impetus. Further improvements as regards energy consumption and efficiency in the transport sector are needed. The document also underlines that the potential offered by Information and Communication Technologies in contributing to energy efficiency should be fully utilized.

Future Challenges

The demographic growth and rising incomes in some developing economies increasingly result in a growing demand in energy, in particular fossil fuels. This constitutes a challenge for the future with regard to security of supply, sources, routes and infrastructure. According to the document, the EU is facing the challenge of coordinating its external energy policy and fully implementing the current framework to secure its supplies. The contribution of energy policy to the fight against climate change remains crucial and shouldn't, according to the document, be downgraded in the difficult context of the economic crisis.

A New Energy Strategy for Europe

To address these challenges, the EU intends to adopt a new energy strategy in view of building a strong and consistent energy policy. The stock taking document presents the key aspects of the new strategy.

1. Implementation of current policies and legislations will be a focal point in the strategy. It will in particular make efforts to ensure the efficient implementation of the 3rd internal energy market package, the Renewable Energy Directive, energy efficiency measures and the SET-Plan.  

2. A long term vision (2030-2050) to reach the EU's emissions reduction targets and a pathway to achieving a low-carbon economy will be an integrated part of the strategy. These elements will be examined in detail in the Roadmap towards low-carbon energy 2050.

To address these focal points, the stock taking document identifies the priority areas that will receive particular attention under the forthcoming strategy.

1. Modern and interconnected energy infrastructure. These should enable the EU to connect to diversified supply sources. The infrastructure should allow renewable energies to be fed into the supply system. Focus should be put on smart grids that could allow optimizing the actions of consumers and producers and increase efficiency. To this end the Commission will adopt an Energy Infrastructure Package in late 2010, that will review the current TEN-E framework, look into developing smart grids, streamline administrative procedures for infrastructure projects and modernize financing. In the longer term the role of the Agency of Energy Regulators (ACER) set up under the 3rd energy market liberalization package and the ENTSOs should be strengthened.

2. A low-carbon energy system. This would be achieved by reducing emissions from energy production, reducing energy needs by realizing further energy savings and efficiency and by promoting the use of low-carbon energy such as renewable energies. The Commission will continue to implement emissions reduction policies such as taxation measures and the Emissions Trading Scheme (ETS). It will present a new energy efficiency action plan, which will upgrade the existing framework and analyze further possibilities for financing. As regards switching to low carbon energy, the EU is facing the urgent need to replace its ageing electricity generation capacity. This could present an opportunity for a massive expansion of renewable energies. The revised ETS scheme will also provide incentives to decreasing the energy intensity of the electricity system. In the longer term, the EU will examine possible actions with regard to licensing and certifications for nuclear investments, and promote green public procurement to boost the development of low carbon technologies.

3. Technological innovation and a drastic increase in private and public expenditure to support R&D. These will be promoted through the SET-Plan, "smart cities" initiatives and by addressing bottlenecks and barriers for private investments in innovation. The Commission will also look into launching specific energy-oriented industrial innovation programs.

4. A coordinated external energy policy. The aim would be to increase the EU's influence on global and regional energy markets in order to ensure the integrity of the internal energy market and to secure energy supply.

5. Protecting EU citizens and consumers against price increases and energy shortages. THE document insists on the full implementation of the 3rd energy liberalization package.

The stock taking document mentions that energy will also be a key component of the EU 2020 strategy, which is the new global economic strategy for the EU, following the Lisbon Strategy.