IIEA Series on Security of Energy Supplies Addressing security of supply: Is the EU heading in the right direction? Christian Egenhofer Senior Fellow, Centre for European Policy Studies, Brussels & CEMPLP, University of Dundee Visiting Professor, College of Europe (Bruges & Warsaw) & LUISS University, Rome Institute of International and European Affairs Dublin, 4 December 2009

completion of internal market and EU integration After 50 years of ignoring, the need for EU energy policy is increasingly accepted … completion of internal market and EU integration depletion of indigenous resources increasing EU external identity (?) changing geopolitics emerging economies climate change policy 2 2

Evaluating driving forces Completion of internal energy market - Convergence of energy markets - Strengthening of EU’s regulatory capacity - Broadening of regulatory considerations Climate change (more convergence) Growing dependency ? Growing external identity?

Most recent developments Increases competition, regulatory capacity, interconnectors 3rd liberalisation package 2. EU energy/climate package Minimises national discretion on fuel mix <-- reinforced by market 3. Lisbon Treaty Establishes EU competence 4. SSER (plus TSER…) Gives strategic handle ? Indicates MS readiness to accept EU action (on infrastructure) 5. E Economic Recovery Plan 6. Gas Regulation Sectoral security of supply policy 4 4

Addressing what security of supply risks ? Identifying EU added-value After Lisbon Treaty – member states remain responsible for energy mix … but EU solidarity clauses Addressing what security of supply risks ? Identifying EU added-value Avoiding moral hazard

Issues Formulating a “European Concept of Security of Supply” (‘E concept of energy policy’): where is EU added-value? Sector by sector Member states disagree on exact features masking disagreement on the role of markets (economic rents; solidarity and moral hazard, an integrated market would do away with national gas security policy With market liberalisation (and ”globalisation) government role has changed; are governments responsible for securing energy supply at affordable prices – or should they set a framework to minimise risks?

Issues (2) The EU role of infrastructure finance Developing a “European System of Energy Regulators”: scope, statute, role of European Commission

Issues (3) External External energy policy in search of the added-value or “speaking with one voice” is mantra … but not the issue : speaking with one voice requires agreement/consensus  Energy security is now part of EU foreign policy but does not go beyond the familiar notion of ”Europeanisation” (projecting the EU’s values externally) Security of supply: security or economic issue? (‘securisation’ – Poland has different view?) What strategy towards Russia ? What does interdependence mean? More honesty on role of EU climate change policy on Russia

Conclusions (EU and security of supply) (General) willingness to act but EU added value required (and not clear) Examples: i) Gas Regulation; ii) (smart) grid, iii) import pipelines (Nabucco) ??? Energy efficiency, renewables & nuclear: added value is given but member states’ interest undermine EU-wide solution  market solution may in the need be the best! Not much EU added value in oil EU security of supply policy will gradually emerge (through organic, possibly regional integration EU external role is exaggerated and success depends on consensus

CENTRE FOR EUROPEAN POLICY STUDIES christian.egenhofer@ceps.eu Place du Congrès 1 B-1000 Brussels T: +32 2 229 3911 F: +32 2 219 4151 www.ceps.eu