ENERGY PRIORITIES FOR EUROPE Presentation of J.M. Barroso, President of the European Commission, to the European Council of 4 February 2011
Contents 1 I. Why energy policy matters II. Why we need to act now III. Four commitments to achieve competitive, sustainable and secure energy for Europe 1. Complete the internal energy market by 2014 2. End energy islands by 2015 3. Boost energy efficiency 4. Greater coordination of EU external energy policy
Why energy policy matters 2 The EU pays 2.5% of its annual GDP to import energy: 270 bn for oil 40 bn for gas We can do better: a truly integrated EU energy market = 0.6%-0.8% increase in GDP 5 million more jobs by 2020 Each consumer to save 100 a year by switching supplier/tariff
Why we need to act now 3 Energy represents 80% of EU GHG emissions Imports are carbon-intensive fossil fuels and increasingly expensive Several Member States rely on a single supplier for gas The EU as a whole will increasingly compete for energy sources Investment challenge around 1 trillion by 2020 (mostly private sector)
Without action, dependence on energy imports will be a growing challenge 4 in % OIL GAS 2005 2008 2020 2030 2005 2008 2020 2030 100 80 82 % 84 % 93 % 94 % 76 % 83 % 60 58 % 62 % 40 20 «Business as usual» scenario based on 2009 figures
New suppliers? 5 Traditional strategic suppliers Emerging strategic suppliers NORWAY RUSSIA LNG* OPEC CASPIAN AL. EAST MED. IRAQ * LNG: Liquefied natural gas (Qatar, Algeria, Nigeria, etc.)
The January 2009 gas crisis is illustrative 6 > 75 % 50-75 % 25 50 % < 25% 0% % of missing gas supply from 6 to 20 January 2009 (- 300 million m 3 /day for 14 days)
Meeting our 20-20-20 by 2020 goals Reduce greenhouse gas levels by 20% Current trend to 2020-20% Increase share of renewables to 20% Reduce energy consumption by 20% 100% Current trend to 2020-10% 7 Current trend to 2020 20%
What the EU renewable target means Share of renewable energy in total energy mix (in %) 60% 50% Additional step to meet the 2020 target 2005 levels 40% 30% 20% 10% 0% 8 EU 2020 EU 2005 Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom EU 27
Global investment in renewables is expanding 9 Billion Dollars Europe China United States Brazil Other America Other Asia and Oceania India Middle East and Africa Source: International Energy Agency
Four commitments to provide competitive, sustainable and secure energy for Europe 10 Complete the internal energy market by 2014 No Member State an energy island after 2015 Boost energy efficiency Greater coordination of EU external energy policy
Commitment 1: Completing the internal energy market by 2014 11 Energy markets remain highly concentrated: - need to encourage new entrants and independent suppliers - need to encourage consumer switching Private actors need legal certainty to plan and invest EU needs: - open and competitive energy markets - integrated and smart infrastructure
Commitment 2: End energy islands by 2015 Only 3% of EU electricity traded across borders 12 Several regions still disconnected from the rest of the EU Key conditions for full interconnection: certainty about future demand and technological needs prospect of commercial returns improved tariff regulations reduction of lengthy authorisation processes EU intervention can help to: set a long-term vision on priority corridors ensure that permitting processes are simplified channel financing to cross-border projects of European interest
Infrastructure priorities by 2020 Gas Electricity Electricity and Gas Oil and Gas Smart Grids for Electricity in the EU North Seas Offshore Grid Baltic Energy Market Interconnection Plan Electricity & Gas 13 North-South Gas Corridor in Western Europe South Western Electricity Interconnections Central / South Eastern Electricity Connections North-South Gas Interconnections & Oil Supply Southern Gas Corridor European Union Directorate-General for Energy November 2010
Commitment 3: Boost energy efficiency 14 Efficient energy use can help to: cut Europe's annual energy bill by 200 billion in 2020 cut consumers annual bills by 1000 per household reduce CO2 emissions by about 740 million tonnes in 2020 help create up to 2 million jobs by 2020 But we are not delivering: only 10% savings by 2020 on current trends large untapped potential in transport and building sectors The public sector should lead by example: public buildings make up 12% of the EU building stock set efficiency standards by 2012 both for new and renovated buildings
What improving energy efficiency means for a single family house built in the 70s (150 m²) 15 No renovation Renovation to new building standard Renovation to low energy house standard Annual CO 2 emissions in tonnes Consumption of heating oil per year 4500 litre 1800 litre 900 litre 2,5 2
Commitment 4: Greater coordination of EU external energy policy 16 EU = 20% of world energy use EU = largest global energy importer EU should: integrate its Southern and Eastern neighbours in its energy market and strengthen cooperation with key suppliers further diversify sources and routes, e.g. Southern Corridor (dedicated gas transport infrastructure) make progress on a single European interface to negotiate purchase agreements with producing countries establish an EU mutual information mechanism by 1 January 2012 to cover all agreements with third countries
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