27 January 2017
Simon Sjenitzer, Director of Energy & Climate Change Business Development, explains and discusses the Energy Union.
Originally conceived back in 2014, the Energy Union was proposed to help address concerns about Russia’s perceived aggression over gas contracts and the annexation of South Ukraine (Crimea).
The original concept promoted by Donald Tusk called for the strengthening of electricity transmission links, region-wide gas procurement and making full use of fossil fuel reserves including coal and shale gas. Not quite on the low carbon message, but remember that he was Poland’s former Prime Minister, and they have a lot of coal.
There were to be 5 pillars to the strategy:
• Energy security: new alliances with pipeline hosts and using all natural resources
• New deal for consumers: promoting consumer participation in energy markets across the EU
• Energy efficiency: in buildings, products and transport systems
• Cutting carbon: decarbonising the energy sector and becoming number one in renewables
• Research and development: renewables, energy efficiency, nuclear and carbon capture
Since the details were first published, several drafts have been issued with varying emphasis on the above 5 pillars based on heavy governmental political lobbying to ensure self-interests were maintained and were somehow still reflected under an attempt to “...please all of the people some of the time.”
The EU ENERGY UNION – what has changed?
• The strategy now has no mention of coal and refers to shale gas with the provision of public acceptance and mitigation of environmental impacts
• Collective gas procurement is now a voluntary scheme, reserved for crisis situations for member states that import all their gas from a single source
• The emphasis on energy security has veered away from the Russian imperative and is now driven by (i) completion of the internal energy market and (ii) more efficient energy consumption
• The commission will ensure that energy efficiency and demand response will compete on equal terms with generation capacity
• Greater emphasis on the need to have a single integrated electricity market
• The EU is not as keen as the UK on Capacity Markets (one of our core components to our Energy Market Reform), and supports them only if adequacy assessments point to such a need, taking account of energy efficiency and demand response
Overall, the EU ENERGY UNION is still seeking to ensure a “....level playing field for all technologies without jeopardising our climate and energy targets”.
In conclusion, to try and accommodate the ideas from all 28 states means an inevitable watering down on ambition. But then....” you can’t please all of the people all of the time”.