28
Sep
2011
Éditoriaux de l'Ifri Édito Énergie
Laura PARMIGIANI

Commission Communication of the EU Energy External Policy: Was There an Alternative? The Energy Editorial, September 2011

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?

Commission communication of the EU Energy External Policy: Was there an alternative?

This is the most obvious question being posed by the Commission when considering its role in EU external energy policy. An overall and coherent collective stance on security of supply is not only needed to have more leverage in negotiations with the world, but it is also a mean of forging a comprehensive energy strategy capable of meeting consumers" needs and finding effective responses based on a sound footing.

To date, a consequence of the lack of a common external policy has been an overlapping of agreements and pipelines (Nabucco, Southstream, Nordstream) negotiated by countries and utilities with priorities set by their own supply needs and commercial strategies rather than any sense for the common good. The EU will have to find a good balance between a strategic role in helping setting the framework for doing business while leaving enough liberty for business to manage its own affairs.

In its communication, the Commission proposes 43 concrete actions and a proposal to create an information mechanism. It is a first attempt to shape an overall strategy on energy external policy and it has to be supported. Nevertheless, it still lacks coherence and can be greatly improved over time.

1) Priority is given to creation of an external dimension reflective of and reinforcing the internal energy market. In order to do so, the European Commission proposes an information exchange mechanism, on the intended content of member states" bilateral negotiations with non-EU entities or states, with the possibility for the Commission to give “an ex-ante assessment of the conformity” of such an intended agreement before it is negotiated. The intent is to ensure conformity with internal market principles agreed among Member States. Such measures can eventually help in multilateral negotiations, but they are mainly legal instruments to ensure conformity.

Additionally, it promotes diversification of supply sources and routes, a stronger integration with neighboring countries and a renewed partnership with Russia. More importantly, the internal energy market must be the basis for any coherent external dimension to exist at all! Making new partnerships or being nominally part of the internal market, as Norway for example, doesn’t mean that the interconnecting networks are really linked and functioning as a free flow area.

2) In this first communication, the Commission does not draw any distinction between electricity and gas markets. Their degree of integration and development is so different that an external energy policy must reflect these differences in its priorities and actions. Europe is very dependent on gas imports, but it is still (and can possibly remain) relatively independent in electricity supply. So network and market integration with suppliers and neighboring states should be translated into differentiated strategies, at least on gas and electricity.

3) There are no timelines. The promotion of cooperation with the Mediterranean countries over renewable energies appears to come before (by order of actions) the need to incorporate the Swiss network into the European internal electricity market. Blackouts in the Italian peninsula can be probably better prevented by electricity coming from Switzerland than from solar panels in a Mediterranean country - at least in the short run. It doesn’t mean that the promotion of renewable shouldn’t be part of a strategy for the Mediterranean region. But it would be probably preferable to base this cooperation on infrastructure and balanced solutions for Mediterranean countries" transmission system as a first step, for example.

4) Coordination among member states through the “Strategic Group for International Energy Cooperation” can be a good way of promoting EU interests with one voice. The risk is in adding one more level of consensus building and another arena for political haggling among member states which could stress differences instead of promoting one voice. Additional coordination obviously forces greater coherence among national and EU level policies, requiring more attention to secure an overall coordinated strategy, internal and external. That is probably good, but may come at considerable cost in time.

Despite these points, the Commission Communication is an important first step. It is clearly a way to deliver a message of European Union solidarity internationally and to reassure European companies that the EU will give the necessary support and timely leverage necessary.

Through the 7th September communication, the Commission can hope to position the European Union as the new leader in negotiating and building bilateral or multilateral energy coalitions.

Europe has a window of opportunity here as a number of significant events is unfolding in world energy markets. If Europe wants to be heard in debates where emerging countries are more attractive partners in energy than mature areas in the industrialized world, it will need a common voice, or Europeans will have little voice indeed.

Keywords
European Energy Policy Security of supply