EU must step up efficient energy use, says energy watchdog

The European Union should do more to use its energy efficiently and to increase the use of renewables, says the energy watchdog of the world’s biggest economies.

Europe’s oil and gas demands need to be cut back as fears of supply shortages are growing, said head of the International Energy Agency (IEA) Claude Mandil the Financial Times on Wednesday (12 April).

"One of the most important ways to increase energy security is through energy efficiency and the market signals for that are not big enough," Mr Mandil said.

"I don’t think goals and targets in shares of renewables or in decreasing energy consumption is a useful tool. We think the [European] Commission could be bolder on norms and standards. It’s within its responsibility."

Mr Mandil fears IEA 2010 estimations of Russian oil supplies, although reliable, have been set too high – adding to Europe’s energy supply concerns.

Moreover, the IEA is worried about the increasingly monopolistic status of Russian state-run energy giant Gazprom and says that the fact that Europe cannot import gas from Russia unless Gazprom agrees, undermines European energy security.

Russia is the world’s largest producer of gas and the second largest producer of oil. More than 50 percent of European gas imports come from the world’s largest country.

Energy efficiency is one of the major tools for strengthening security of energy supply as well as reducing costs and lowering CO2 emissions, according to the IEA.

The agency estimates that 10 percent of the world’s energy demand could be saved by 2030 simply by seizing currently available energy efficiency opportunities.

National protectionism

Energy leapt onto the EU agenda earlier this year when Gazprom turned off the tap to Ukraine in a price dispute affecting European gas supplies.

The row prompted Brussels to focus on EU energy security and on its internal energy market, which is dominated by national interests.

The EU has recently seen an increase in national protection of energy companies in relation to foreign takeovers, especially in France and Spain, prompting the commission to take legal steps towards a fully open EU energy market, which it plans to have by July 2007.

According to the IEA, national political interference in cross-border mergers in Europe can pose a "real threat" to the development of competition on the European Energy market.

"Such interventions based on national strategic considerations seem outdated and incompatible with the spirit of a transparent, efficient and functional internal market," the agency said in a statement.