Wednesday

8th Jul 2020

EU will 'assess rigorously' new Russia-Germany pipelines

  • Gazprom is planning to double the capacity of its pipelines to Germany (Photo: Nord Stream AG)

The European Commission will scrutinise the plan to build additional natural gas pipelines between Russia and Germany, it said in a leaked draft of an assessment of the EU's energy policies.

The document, an undated working version of energy commissioner Maros Sefcovic's first State of the Energy Union address, said the Commission "takes note" of Gazprom's plan to double from two to four the Nord Stream pipelines through the Baltic Sea.

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  • 'As with any other pipeline in the EU, these pipelines will have to comply fully with EU law', commissioner Sefcovic is expected to say. (Photo: European Commission)

"As with any other pipeline in the EU, these pipelines will have to comply fully with EU law ... The Commission will assess it rigorously against the European regulatory framework", noted the document, which was leaked to Brussels-based energy blogger Alice Stollmeyer, who published it online.

The State of the Energy Union, scheduled to be held on 18 November, will be the first of a series of annual speeches in which Sefcovic will take stock of the EU's aim to increase energy security, decrease its reliance on fossil fuels, and to create a single market for energy.

"In 2015, progress was made in three fields that lie at the heart of this transition: emissions trading, renewables, and the further investments in low carbon technologies and energy efficiency", the draft speech said.

It brought to mind that since Sefcovic presented the Energy Union strategy paper in February, the EU institutions finalised a market mechanism for the fledgling emissions trading system – although the mechanism will not operate until 2019.

The price of carbon emissions has risen only slightly, from around €7 to €8 per tonne CO2, while experts say a price of around €30 is necessary for the emissions credit system to work.

The speech will praise the fact that the EU will probably reach its targets for renewable energy, but said that most EU countries "should accelerate their ambition levels in order to achieve their national energy efficiency targets for 2020".

"With regard to electricity infrastructure, 22 member states are on track to reach or have already reached the 10% electricity interconnection capacity target for 2020."

The eight laggards are Cyprus, Ireland, Italy, Poland, Portugal, Romania, Spain and the United Kingdom.

Sefcovic will also focus on the role of consumers.

"Consumers – both households and industry – want more transparency of energy prices and costs. Therefore, the Commission will publish in 2016 a new energy price and cost report to provide an overview of the cost of energy, taxes, levies, but also subsidies", the text said.

Renewable energy sources such as wind power and solar are sometimes discredited in national political debates as oversubsidised, while some estimates have shown that the fossil fuel sector actually receives more state support.

The text said the Commission will publish on the same date of the speech "a proposal to improve European statistics on gas and electricity prices".

It also noted that smart meters have been "effectively implemented only in some member states (most notably Finland and Sweden)". The smart meters, which can give consumers a better idea of their energy consumption and help change behaviour, were adopted "to a lesser extent" in Denmark, Estonia and the Netherlands.

"In several member states, administrative burdens act as barriers for consumers aiming to switch to new suppliers and better contractual conditions", it said, adding that all EU countries "need to better inform consumers about energy efficiency options and to further improve the investment conditions for private consumers".

On gas, the Commission will also note that six of EU's members "(Bulgaria, Czech Republic, Hungary, Romania, Slovakia and Finland) are solely dependent on Russia for imports of natural gas".

Sefcovic will announce that the Commission will publish in "early 2016" a strategy paper on liquefied natural gas and gas storage, as well as new rules on intergovernmental agreements which countries close with companies in non-EU countries like Russia.

"To increase transparency and to ensure that intergovernmental agreements (IGAs) in the energy field comply with applicable EU legislation and policies, the Commission will propose in early 2016 a revision of the current decision on intergovernmental agreements."

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Planned German coal exit boosts case for Nord Stream 2

German commission recommends phasing out coal power over the next 19 years - which will provide additional arguments to build the controversial Nord Stream 2 pipeline from Russia, which both the European Commission and the US have reservations about.

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