Tuesday

26th Jul 2016

EU lists 'key' energy projects amid criticism

  • A new addition to the EU letter soup: PCI - "projects of common interest" (Photo: European Commission)

The European Commission on Monday (14 October) listed 250 "key" energy infrastructure projects eligible for quicker EU funding to the tune of €5.8 billion in the next seven years.

"Our vision is that Europe should have a cross-border dimension in the field of electricity and gas, connecting EU countries to Switzerland, Norway, Ukraine, Russia, Turkey, the Caspian region and north Africa," energy commissioner Guenther Oettinger said while presenting the priority projects.

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The list, which still has to be approved by member states and the European Parliament, contains cross-border pipelines and electricity grids for all 28 member states.

Some of the projects are solely within a country - electricity lines in Germany or liquefied natural gas terminals in Greece and Lithuania.

But Oettinger said that they all help distribute more electricity or gas to neighbouring countries, too.

And to those disappointed that their project did not make it on the final list, the commissioner noted that the "projects of common interest" are set to be updated every two and a half years, as they should not take longer than three years to be implemented.

He also said that although a key EU project called Nabucco has been scrapped and replaced with a less ambitious pipeline, it will still bring 10 billion cubic metres of gas from Azerbaijan to the EU market, via Greece.

Oettinger also hopes to hold "binding discussions" with another oil-rich Caspian country, Turkmenistan.

Both countries have autocratic leaders, virtually no freedom of press and a penchant for rigging elections and appointing family members to the ruling elite.

Petr Hlobil, an expert with Bankwatch, a Prague-based NGO looking at where funding for energy projects goes, criticises this support for Caspian dictatorships.

"If these projects are financed, they will keep up the support for these regimes. We believe it would be much better to invest in infrastructure within the EU," Hlobil told this website.

"On one side the EU gives warnings, its election monitors last week said Azerbaijani elections were rigged, there is no freedom of press. And then it approves these projects which bring in a lot of revenues to highly corrupt governments," he added.

The expert also criticised the list as being a "compendium of different priorities of national governments rather than a coherent EU policy."

The same criticism comes from Berber Verpoest, another expert affiliated with Counter Balance, a European coalition of development and environmental NGOs.

"If you look at the projects, the emphasis is clearly on electricity, gas and roads. But we don't see any link and policy coherence with EU's environmental and climate change policies," Verpoest told EUobserver.

He also noted that funding for the projects - via project bonds - are problematic because "profits are private while costs are being socialised."

Under the new funding scheme launched last year as a counter-measure to unemployment and austerity, the EU guarantees loans to make it easier for investors to get infrastructure projects up and running.

"But if a project goes wrong, it is guaranteed by public money," Verpoest said. He noted that in Spain the government is opposing the scheme because it increases its debt burden.

Some MEPs meanwhile have also attacked the scheme. Liberal British MEP Graham Watson says the list "is a missed opportunity for desert solar energy."

"Other than a cluster of interconnections around Greece, Cyprus and Israel, there are no projects on the list that could connect Europe to the plentiful and cheap solar power potential of North Africa and the Middle East," Watson said.

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