European Energy Policy

The shocks from COVID-19 likely to affect energy and the climate are multiple and unprecedented in scale and scope.

Shocks from collapsing prices due to plummeting and then paralyzed demand combined with overproduction: this is the case for oil, but also to a lesser extent for electricity and gas. Other raw materials are also being affected.

Shocks to investments, because oil as well as electricity companies are experiencing dramatic falls in earnings while waiting for the peak of the pandemic to pass. They are cutting spending and revising or postponing projects. Jobs and smaller company survival are under threat.

The European Union (EU)’s Green Deal is a game changer with attention so far focused on forthcoming actions plans, the Climate Law, financial resources, the revision of the 2030 targets and of the emissions trading system (ETS). 

The European Union is about to adopt new renewable energy targets for 2030. While going beyond the initially-planned 27% is absolutely feasible, the EU strategy can only be credible if it is based on a good mix between performance and effort obligations, and also includes possible review clauses.

The signing in January 2009 of the gas supply and transit contracts between Gazprom and Naftogaz marked a turning point in Russian-Ukrainian gas relations: yearly intergovernmental, last minute and non-transparent winter deals were replaced by a predictable, long term commercial relationship. 

With the launch of its “battery alliance”, the European Union is finally taking up the industrial battle with Asia and hopes to meet a large share of the surging demand for electrical batteries. Yet, the clock is ticking and the future of battery manufacturing in Europe depends primarily on the strategies that automakers will adopt.

European clean transport policy envisages the development of charging infrastructures for electric vehicles within a European e-mobility framework. After the downturns of the Volkswagen scandal and the prevailing low European carbon price, the EU is bringing forward car passenger transport electrification. This requires new business models based on interoperability.

RWE, EON, EDF, ENGIE and other large utilities are in financial turmoil. This situation, which would have been unlikely twenty years ago, is related to several failures in governance within the EU as well as to global evolutions. This Edito Energie analyses the situation of large European electricity producers in light of the European energy policy. 

The Ifri Center for Energy held its annual conference in Brussels on March 4th, 2015. The event gathered more than 150 participants, together with prominent policy makers, industry leaders and distinguished academics to discuss how the European energy policy can deliver effective results in light of geopolitical upheavals, technological developments and governance issues.

To download the presentations, click here

EU is the world’s largest net energy importer and consumer, so why do its Members continue to negotiate individually with the rest of the world rather than as one big market with a big voice?

Summing up Europe’s climate policies suggests we still haven’t grasped the full potential for energy savings. We act as if we were living in a system with infinite resources easily exploited by human innovation and ingenuity. We focus on the efficiencies we can gain from components of our system, but not on the system as a whole and we do not consider how the other billions of people on earth can achieve our level of comfort with a resource or carbon-constrained future and with aspirations that necessarily imply sharply growing energy consumption.

Who hasn’t heard of the 3x20, those pillars of European energy policy? And yet who is able to give their exact definition?

A year ago, I would have responded to this question rather positively. Nowadays, I am not so sure. My relative optimism before was based on the replacement of a group of monopoly-holding (at least regionally) national operators, by an oligopoly of operators with a sizeable proportion of their activity outside of their countries of origin. These included EON, EdF, RWE, ENEL, GDFSuez, IBERDROLA, VATTENFALL and others.