EU Energy Policy

Well leaks seem to abound this morning about a draft policy paper which European Commission president José Manuel Barroso is circulating prior to the March 23 summit (and here). According to the leaks the paper proposes a coordinated approach designed to achieve a new long-term partnership with Russia and the creation of a gas stockpile, which could be released as a gesture of ‘solidarity’ in times of disruption.

Some difficulties are already evident, expecially in the light of the resurgence of neo-protectionism in some important EU states which seems destined to place limits on any attempts to increase cross-border connections and competition. Another possible issue is the idea of approaching Iran as an alternative gas provider, a suggestion which seems to highlight better than anything the fragility of our present supplies, especially if Iran and Russia were ever to decide that it was in their interests to have a common policy vis-a-vis the EU.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

2 thoughts on “EU Energy Policy

  1. Meanwhile the Greens have released a more “green” proposal. Apart from the fact that most of their sensible proposals already are incorporated in other EU plans on energy and efficiency one part stands out. The part about raising taxes to cure energy companies´s “bias” is oh so predictable.

    “The Green’s Vienna Declaration, published on 7 March 2006, urges the Commission to launch “a master plan for reducing the use of oil” in the transport sector as a key objective for the EU’s forthcoming energy strategy. This, it says, should be done by raising fuel efficiency standards for cars and trucks, developing public transport and train connections as well as introducing a [b]tax on windfall profits to oil and electricity companies[/b].”

    “The increases in windfall and other profits of the energy companies have lead to a rapid increase in proposed mergers and acquisitions, such as E.on-Endesa or Suez-Gas de France. This market concentration increases the economic and political power of the large companies and decreases competition and technological innovation. All market based instruments – like CO2 trading, green certificates, white certificates – will not function satisfactorily as long as the underlying electricity and gas markets are biased. In the light of this a number of steps must be taken: • Introduce a ‘windfall’ profit tax (also called a stranded benefit tax) on utilities and reinvest the revenue accrued to compensate those consumers most hit by the market imperfections and to encourage new highly efficient market actors, ideally renewables, and energy efficiency services. • Harmonise EU-level rules on mergers and acquisitions and measures to prevent market dominance. • A third package of legislation for the energy sector in order to re-regulate the market and solve outstanding issues like ownership unbundling, access to storage and the segregation of nuclear decommissioning funds. • Strengthening the European Emission Trading System and making sure that the different national allocation plans (NAPs) lead to a significant reduction in CO2 emissions from the power sector in the short term and do not favour coal power. To this end, the auctioning of CO2 allowances must be introduced for the second phase of the ETS.”

    Rather no goal, gas or nuclear either.

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