Saturday

25th Mar 2023

Opinion

Europe at an energy crossroads

  • Global energy prices are skyrocketing. From 2010 to 2011 alone, the EU’s oil bill increased by nearly €100 billion. (Photo: Kevin Krejci)

The invention of the steam pipe, spinning Jenny and other technologies dramatically increased production speeds and revolutionised European society in the 1800s.

We need to stoke the boilers again, but this time we need to do it with affordable, clean and safe energy and that is why the EU stands at an unprecedented energy crossroads, facing an urgent need for huge power investments in the next two decades.

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A new investment cycle is taking place, as infrastructure built 30-40 years ago needs to be replaced. If we take the right strategic decisions now, investments will cost less and avoid disruptions in the longer term.

Energy infrastructure includes power plants, transmission lines, gas networks and more amounting to combined investments for hundreds of billions of euros. The investments we choose today will bind us for decades to come. We must be completely clear about how we want the EU’s energy sector of tomorrow to look like. We need a shared, long-term vision that can guide policy decisions and investments and establish the longer-term framework here and now.

The Energy Roadmap 2050, presented by the Commission in December 2011, is the key element for this discussion.

There is no doubt that we must make targeted investments that will ensure all European residents and businesses access to affordable, clean and safe energy in the years to come. This requires Europe to make a series of landmark decisions this year.

In light of the economic situation it is vital that these decisions be cost effective and takes account of the competitiveness of businesses and support economic recovery. Setting the right framework for low carbon economy can be a driver of innovation that gives possibilities for the EU to achieve and maintain global technological lead positions by which the strong positions of European companies are improved by virtue of, for example, efficient use of energy and the use of renewable energy.

The EU must lead the way, and if the EU does not seize its opportunity, instead, the growth potentials will be exploited elsewhere, notably in China and USA.

We suggest three main approaches to the matter:

First, the International Energy Agency has sounded the alarm. Global energy prices are skyrocketing. From 2010 to 2011 alone, the EU’s oil bill increased by nearly €100 billion. It is high time that we put a plug in this hole and redirect our money from importing energy from outside the EU to making energy investments in Europe.

Improving energy efficiency is not in opposition to economic growth, it is instead a prerequisite for economic growth. The Commission estimates that increased energy efficiency could create two million new jobs in Europe. While Denmark holds the Presidency of the Council of the EU, we have the opportunity to adopt the Energy Efficiency Directive, which is the main vehicle for closing the gap to the target of 20 % energy savings in 2020.It is vital that the Energy Efficiency Directive is in place. It is a cornerstone in the framework for a sustainable energy system.

Secondly, we must in the coming months discuss the path we want to set for 2030 and beyond. We have set our targets for 2020, but companies and investors need to have longer term predictability. It is important to provide incentives to support a transition to a low carbon economy – both up to and after 2020. This aims to secure investments in energy efficient technologies and the expansion of renewable energy and other low-carbon energy sources, contributing to ensuring stable energy supply and to supporting European jobs and competitiveness.

Establishing a post-2020 policy framework with clear milestones would send a strong message to the market around the world and lay the groundwork for the EU’s continuing alliances with international partners.

Finally, we must invest in European energy infrastructure by making strategic investments that can bind countries together, even over long distances. All of Europe must be involved in these efforts. An integrated internal market for energy will contribute to promoting competition, give consumers and companies lower electricity prices and make it easier and cheaper to integrate increasing quantities of renewable energy into the energy network. Hence better integration will contribute to reducing dependence on imported energy from third countries and thereby strengthen Europe’s energy security.

As seen in these days of extreme gas and electricity consumption, it will also reinforce the solidarity amongst Member States.

Europe is in the midst of an economic crisis of historic proportions and we cannot afford to waste money. A focused effort to develop affordable, clean and safe energy will create jobs in the short term, ensure European competiveness and affordable prices for consumers in the medium term and make an invaluable contribution to the planet’s climate in the future.

It’s going to take courage from the European Parliament, the Council of Ministers and the Commission. We urge all to focus on these challenges, especially for the next five months. If we do not, we will become the back seat driver, finding ourselves unable to keep up the pace in the global energy race.

Günther Oettinger is European Commissioner for Energy. Martin Lidegaard is Danish Minister of Climate, Energy and Building and chairman of the Council of Ministers of Energy.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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