A Long Road To Securing Energy

By MEP Nils Torvalds
Summer 2015

"Energy is essential for Europe to function. But the days of cheap energy for Europe seem to be over. The challenges of climate change, increasing import dependence and higher energy prices are faces by all EU members. Moreover the interdependence of EU Member States in energy, as in many other areas, is increasing - a power failure in one country has immediate effects in the next. Europe needs to act now, together, to deliver sustainable, secure and competitive energy."

This is not a paragraph of the European Commission's proposal on an Energy Union, although one would be inclined to believe so. The text is from the Commission Communication on An Energy Policy For Europe, dating back to January 2007. Indeed, the similarities are striking.

The work on strengthened EU energy policies have been ongoing for long, and the objectives seem to have remained similar, even identical, for at least a decade. However, the world has changed in many ways during this time. Many of the challenges remain, or have transformed over time. At the same time, one could get the impression that nothing or almost nothing has been achieved during the years.

The Achilles heel of European energy policies is nothing new: Today, the EU still imports over half of the energy it consumes. One third comes from one external supplier - Russia. The import cost amounts to more than 1 billion euros, per day.

The crisis in Ukraine brought back energy security as one of the most urgent issues on EU's foreign policy agenda, and the concurring crises in the Middle East and Northern Africa add to the challenge of secure energy supplies. This all makes energy security a topic that the EU cannot - and should not - avoid in upcoming talks on the Energy Union.

One essential challenge is to even identify a precise definition of energy security, in order to pinpoint policies and measures aimed at increasing security of energy supplies. Perhaps the lack of energy security is easier to define. The potential threats to energy supplies are very context bound, and change shapes and faces over time. It's a mixture of geopolitics, international (and internal) markets, but climate change and environmental policies are also parts of the package.

Being such a broad and cross cutting issue, energy security will be challenging to coordinate in a decision making structure as complex as that of the EU. It will demand streamlined and coherent work in many sectors and by many actors. These requirements will be very challenging - to say the least - for the Commission, for the Member States, for External Action Service, and for the Parliament. Governance will be a key issue, but likely also heavily debated. Although several energy policies have been drawn up before, implementation has always been an uphill struggle. This will be even more critical this time, depending heavily on the attitudes of Member States.

Previously - especially when it comes to oil and gas supplies - Member States tend to have pursued their own aims and interests. There has been no common orientation in terms of external energy policies, which has been reflected in the EU foreign policy related to energy issues. It is only in recent years this has begun to change, with a number of energy agreements and infrastructure projects, such as gas pipes, with third countries. Yet, progress has been far from easy, and far from solving all problems. The unrest in many supplying third countries makes diversifying energy supplies a questionable solution.

Increased interconnectivity within EU could stabilize energy supply significantly, but require enormous investments for the infrastructure needed. The drafters of the Energy Union proposal have had their eyes on the European Fund for Strategic Investments - or the so-called "Juncker Fund" - to help pour money into cross border cables and pipelines, but the issue will hardly be solved on any short-term basis. Interconnectivity is also desirable in order to reduce energy prices in Europe - which today are among the highest in the world - which in turn could foster investments and competitiveness, and ease the pressure on consumers' wallets.

The struggles with law proposals such as the Emissions Trading System and Market Stability Reserve as well as indirect landuse change and biofuels have revealed how fundamentally different the energy structures of the EU Member States are. The division is enhanced when forming common policies and pushing for progress, making the least prepared states hit the brakes. This stalls technological and economic development in EU, and also slows down a multifaceted approach to energy security.

Not only - but perhaps in particular - as the COP 21 in Paris approaches, Europe should not neglect climate goals and undertakings when seeking to increase energy security. Instead, new approaches could enable synergies between these two goals.

For this, the bioenergy sector may play a highly interesting role. Heavyweight actors, both within the EU, but also within UN, stress the potential of locally produced biofuels. Especially forest-based bioenergy could have significant climate benefits, when managed sustainably, and attract much needed investments and job opportunities especially to rural parts of the EU.

The counterpart of interconnectivity is technological progress. New ways of energy storage could probably make it more economical and efficient to build local high-tech solutions. The technological breakthroughs in recent years are providing us with more tools than our precedent decision-makers have had. Now, we have the responsibility to make use of these tools - if the Member States can overcome their differences in favour of a common goal. In 1952 that was made possible through the European Coal and Steel Community. It is as needed today, but one could - on good grounds - doubt EU's ability to make far-reaching and intelligent decisions. The EU won’t achieve energy security by circulating good intentions, but by concrete action and cooperation.