Sunday, 18 January 2009

Energy priority of Czech EU Council Presidency

One of the three E’s or priorities of the Czech Presidency of the EU Council is Energy, while the other two are the Economy and the European Union in the world.

Even if the Czech Republic chairs the meetings of the Council and the European Council only during six months, the priorities chosen are of strategic importance. The economy is in tatters almost globally. Energy supply and energy markets have taken a beating in the brawl between Russia and Ukraine. Without a more unified and resourceful European Union internationally (as well as internally) the individual member states and the EU citizens will continue to be helpless victims of events.

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Work Programme

The choice of energy as a priority is a right one, but what does the future hold in store (until 30 June 2009)?

The Work Programme of the Czech Presidency, Europe without Barriers, sets the scene in the following way when it introduces the main points of the priorities:


Energy

A central theme for the European Union during the Czech Presidency will encompass the set of issues related to the energy sector and an active involvement in international negotiations about climate protection after 2012. This is a pressing topic, significantly concerning the economy and having international policy and security implications. Building upon the commitments of the European Council from March 2007 elaborated further in the adopted Climate-Energy Package, the Presidency will strive to prepare a path for reaching a broad international consensus on how to face climate change, which should be reached at the end of 2009 in Copenhagen. It must be stressed that any solution to the climate issue will imply not only certain economic and political costs, but also opportunities.

Energy security is a basic prerequisite for the functioning of the EU economies. In light of the EU’s increasing dependence on energy imports from the surrounding world, it acquires a special urgency. The EU’s goal in this regard is to achieve a greater territorial diversification of suppliers, a broader range of utilised sources, an enhancement of the range of renewable resources and the creation of a truly unified internal energy market in the EU which would allow for solidarity in crisis situations. Overall, the path of reducing the economy’s energy intensity must be pursued, as well as reducing the economy’s impact on the environment at European and global level.

On the basis of the Commission’s analyses and proposals, especially its Strategic Energy Review, the Presidency will proceed in preparing a solution along several lines outlined during the French Presidency. One of them involves energy savings, purposeful substitution of imported and fossil fuels and supporting the investment into new efficient technologies. Another one consists in completing the internal electricity and gas market and its technical and organisational requirements. This includes, above all, completing the missing segments of the existing transmission and transport infrastructure in the EU and coordinating the activities of transmission network operators. An important line involves stabilising relations with the main foreign suppliers of energy sources, primarily in terms of clarifying Russia’s role and developing strong relations with new suppliers. Special importance must be attributed to suppliers from the Caspian region and to the construction of the relevant transport routes.


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Energy Policy

Later the programme goes into more detail, with huge challenges on many fronts. This is an agenda EU citizens need to watch:


The Czech Presidency will continue to develop the EU energy policy. It will support measures leading to the improvement of the operation of the internal energy market, increasing energy efficiency, effective use of energy sources, saving energy and diversifying supplies from external sources (including transit routes). The chosen measures must fully reflect the EU’s integrated approach towards policy on energy and climate protection. The Presidency will put emphasis on the long-term cost-efficiency and sustainability of the chosen policies, taking account of the particular situation of each Member State. The priorities of the Presidency in relation to the energy sector will be based on the implementation of the Action Plan for the period 2007-2009 ‘An Energy Policy for Europe’. The Presidency will build on the debates on the updated 2nd Strategic Energy Review at the Transport, Telecommunications and Energy Council (TTE), and will incorporate the outcomes of the debates on the Review into the conclusions of the Spring 2009 European Council. The Spring Council should define specific suggestions for further development and begin the preparation of the second Action Plan on Energy Policy for Europe (2010-2012). The Presidency will focus on the need to develop infrastructure, complete the creation of the common energy market, following the approval of the 3rd Energy Package, strengthen coordination in the area of foreign relations, in particular in respect to producers of crude oil and natural gas and in respect to transit countries; and last, but not least, further develop state-of-the art energy technologies.


Energy Security and Reliability

Guaranteeing energy security is a necessary prerequisite for the EU’s economic development and political stability. The Presidency intends to contribute to its strengthening, primarily in three respects: by identifying priority infrastructure projects, based on a medium- and long-term analysis of supply and demand; by supporting the development of energy infrastructure and initiating a debate on the possibilities of improving the existing processes in terms of legislation and implementation; and by creating and developing contractual relationships with third countries and regions, with the aim of ensuring permanent supplies and actively contributing to the diversification of energy sources and transit routes.

With respect to external energy relations, the Czech Presidency will focus on Russia, Ukraine and the Caspian region. The Presidency will also, among other things through the preparation of the Action Plan for 2010–2012, actively promote an overall strengthening of the dialogue with the countries of the Caspian Sea region, while implementing the EU’s common external energy policy. During the Czech Presidency, a ‘Southern Corridor Summit’ on energy will be organised, emphasising the strategic significance of the producer and transit countries of this region. In respect to Russia, it will be necessary to address all aspects of Russia’s role as the supplier of energy to EU markets. The Czech Presidency intends to organise an extraordinary meeting of the EU-Russia Permanent Partnership Council and an EU-Russia summit in May. In the case of Ukraine, the debate will focus on issues associated with secure and reliable energy transit. The Presidency will support any activities conducive to a greater diversification of energy sources and energy supply modes for EU Member States.

The Presidency will support activities leading to the completion of the construction of the missing segments in the existing energy transmission and transport infrastructure within the EU, and improved coordination of the transmission system operators. As part of the final negotiations on the 3rd Liberalisation Package, the Presidency intends to promote the development of coordination mechanisms for the European Network of Transmission/System Operators for electricity and gas (ENTSO-E, ENTSO-G) which will enable their daily communication and prevent energy supply outages. The Czech Presidency maintains that the future security and reliability of electricity supply via the European transmission network will also depend on the balanced operation of different types of power plants.

The Czech Presidency will try to reach an agreement on the review of rules applicable to the creation of emergency crude oil and petroleum products stocks. The legislation should make sure that in case of an outage of crude oil supplies, each Member State should have emergency stocks at its disposal.


Internal Market of Electricity and Natural Gas

The Czech Presidency considers the creation of a transparent, stable, efficient and interconnected internal electricity and gas market to be a necessary prerequisite for a secure, sustainable and competitive energy supply. The completion of discussions on the 3rd Liberalisation Package, and reaching an agreement on it within the term of the present European Parliament, is one of the main tasks of the Presidency. In connection with the regular Annual Report of the European Commission, the Strategic Energy Review, and the Green Paper on Trans-European Energy Networks, the Presidency will pay due attention to the issue of investments and other issues related to the completion of the construction of the required transmission and transport capacity within the Member States. The Czech Presidency considers this issue to be one of the key areas for the completion of the creation of the common market. Only a completed and fully operational internal market in electricity and gas will create a predictable and stable environment for the EU, which is necessary for investments and cross-border cooperation. The Presidency will open a debate on the issue of the possible introduction of a single transparent tariff for the international transmission of electricity for the purposes of both the internal market and international trade in electricity in Europe. Such a tariff would be a payment to benefit the integrity and reinforcement of Trans-European Energy Network (the European power grid). Regarding the internal electricity market and the enhancement of energy security, the Presidency will organise a conference in Ostrava at the end of January 2009, on the theme Ensuring Energy Security of EU Member States on the Common Electricity Market.


Energy Efficiency and Low-Carbon Energy Sources

The enhancement of energy efficiency and its economical use is one of the key means towards strengthening energy security, an important pillar of the ambitious policy on tackling climate change and a tool for promoting the competitiveness of enterprises. The Presidency will therefore continue to discuss specific consumption-related measures (the labelling of household appliances and tyres with energy labels and increasing the energy efficiency of buildings) and try to conclude the revised proposal for a framework directive determining requirements for the ‘Eco-design’ of products at first reading.

The Presidency will support a critical and open debate on all available energy sources and their economical use in line with the EU’s climate protection commitments. In doing so, it will focus on the support for new technologies, energy savings, the debate about the opportunities and risks associated with the use of nuclear energy, the issue of the opportunities and risks associated with the use of biofuels, and last but not least, the impacts of wind energy production on transmission network stability. Along these lines, it will promote the activities of the Nuclear Forum and maximum application of the results of the work of the High Level Group on Nuclear Safety.

The Czech Presidency will participate in the debate on supporting the use of clean coal technology and demonstration projects for the system of capturing and storing carbon emissions (CCS technology). In the first half of 2009, a debate will be held on the implementation of the European Strategic Energy Technology Plan (SET-Plan). The Presidency will support the translation of the SET-Plan into practical steps and initiatives, including the strengthening of research and development and the development of new forms of cooperation. From the perspective of the Czech Presidency, the EU should play a leading role in the development of these technologies.


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Convincing crisis

The Czech Presidency of the EU Council quickly had to take on the crisis generated by the conflict between Russia and Ukraine, which hit several UE member states severely. The reliable supply and continuous transit of gas, as well as the strategic importance of the rest of the energy programme, could hardly have been illustrated more clearly.

Now is the time to act on the good intentions, including the institutional deficiencies hampering the EU’s progress internally and internationally.

Although far from enough, ratification of the Lisbon Treaty would send a clear signal that the Czech Presidency takes itself seriously.


Ralf Grahn