Secure and sustainable

Loyola de Palacio
outlines a strategy to meet the energy challenges of a changing world.

Energy supply is the chief challenge among a number that are facing the European Union (EU) in the energy sector. Towards the end of 2000, the European Commission published a Green Paper on the subject, the springboard for a frank discussion on energy policy. This ongoing dialogue involves all the European players, not just the energy suppliers and the energy industry, but also consumers and the non-energy sectors, including politicians both inside and outside Europe.

The Green Paper’s starting point is the EU’s high dependency on outside countries for its energy supply; nearly 50 per cent of it comes from external sources. What is more, experts forecast that this will increase to as much as 70 per cent by the decade 2020-2030. And the situation is likely to worsen further with the enlargement of the EU, as it contends with rising demand, increased reliance on imported fuel, and the difficulty of reducing greenhouse gas emissions.

Strategy for the future
The Green Paper has prompted a major debate on the security of the energy supply, and the European Commission has itself put forward several ideas. First, it demonstrates that a proactive approach to saving energy is the first crucial stage in developing a sustainable energy supply policy. In the transport sector, which is nearly 100 per cent dependent on oil, improved management of demand could help reduce this massive reliance on fossil fuels. As with buildings, a wiser use of energy would lead to immediate reductions in greenhouse gas emissions. Conserving energy is thus one of the pillars of a sustainable supply. The second pillar concerns European policy regarding liberalizing internal energy and gas markets. Adopting electricity and gas directives and implementing them at national level have made it possible to reap considerable results with respect to opening up the markets to competition. Some obstacles remain, however, and much still needs to be done to guarantee the optimum functioning of the single market – and to achieve a harmonized market as opposed to the mere juxtaposition of 15 liberalized markets.

With this aim, the Commission proposed a new package of measures for completing the internal energy market in March 2001. This allows for opening up the electricity market for all industrial customers in 2003 – and for extending this to the gas sector in 2004 and to all residential customers in 2005. But this liberalization must take place within a regulated competitive framework. Each state will need to appoint an active body to monitor the market – that is, to maintain a balance between supply and demand, to anticipate developments, to forecast change, prospects and additional capacity requirements, and to keep an eye on the level of competition in the marketplace. It is essential for us that liberalization is not at the expense of the security of supply or to the detriment of public service.

The third vital tool for a sustainable energy supply is technology. A whole array of technologies for cleaner energy generation and use exist. The massive growth of the European wind power industry over the last decade sets a promising example for other renewable energy industries. Similarly, European businesses are global leaders in clean coal technologies, which can cut emissions from coal-powered plants in half. Industry around the globe can benefit from our innovations. As for nuclear technologies, the EU will pursue its technological research to ensure the highest safety standards and the best possible management of radioactive waste. It is my view that nuclear energy is vital to the future security of Europe’s energy supply. It is not only a major factor in diversifying our supply, but also enables us to avoid producing hundreds of millions of tonnes of greenhouse gases. I believe it is essential to keep this option open if we are to meet the Kyoto targets. Lastly, we would like to achieve greater transparency and, above all, greater stability in the energy markets. We can use existing structures to a certain extent, particularly by entering into a producer/consumer dialogue with oil-producing countries. We would also like to increase our collaboration with other key players in the energy sector. One of these is Russia, which has long been an energy partner and with whom we are building a strategic alliance.

The EU is already Russia’s main business partner: energy represents 45 per cent of its exports to the EU in terms of value. Similarly, around 20 per cent of the EU’s oil imports, and 40 per cent of our gas ones, come from Russia. So as part of our aim of liberalizing and integrating energy markets, we are examining – with Russia – the common interests in our energy relations and the areas where we can make real progress towards a partnership. At a meeting with President Putin in November 2001, we identified a number of specific short-term actions and some major longer-term possibilities worth exploring at a later date. At the same time, we also hope to encourage collaboration with our partners in the Southern Mediterranean, Latin America, Africa, the Caspian region and Asia.

International cooperation
In publishing the Green Paper, the European Commission hopes to place the energy supply strategy in its widest context – a global one. As recent international events have demonstrated once again, we must act in concert: tackling world problems requires a global vision. First, let me refer to geopolitical events. The 11 September 2001 marked the beginning of a new phase in international relations. Uncertainties caused by the terrorist attack in the United States, and by the ensuing response, will have an impact on the whole world, as well as on the regions directly affected. The impact on energy markets is far from being obvious, as the recent fluctuations in oil prices show. Secondly, the trends in energy demand have consequences for us all. Universal pressure on the limited global reserves of fossil fuels is likely to create problems for future generations. Take the exploitation of coal which, in some countries, is the preferred fuel for generating electricity. The technology exists to use it to do this more cleanly. Are we prepared to make the considerable investments necessary to benefit from it? Yet climate change demands it.

As for oil resources, the problem remains unchanged. All countries demand an improved standard of living, which increasingly relies on oil, especially for transport and electricity. But how can we satisfy needs without exacerbating climate change and jeopardizing the security of supply? Nuclear generation, which is low in greenhouse gas emissions, is an attractive option for electricity, but it must ensure the highest levels of safety and waste management, as an imperative.

Those of us involved in energy policy have a responsibility towards our citizens. Their – our – way of life depends on having a reliable, affordable, clean supply of energy. But we also have a duty towards future generations. That is why we must develop sustainable visions that guarantee the supply while minimizing its impact on the environment, and use the resources available to us in the best possible way.

Each of our regions has much to offer. But the energy question is a global one which requires a global response. We must urgently tackle the problem head on and face up to the realities of the present. We must also go beyond our regional discussions and enter into a fruitful global dialogue, which alone will make it possible to maintain sustainable development and guarantee the next generations a future for our planet

Loyola de Palacio is Vice-president of the European Commission, Responsible for Transport and Energy.

PHOTOGRAPH: Franco Sacconier/UNEP/Topham

This issue:
Contents | Editorial K. Toepfer | Secure and sustainable | Fuelling multilateralism | Meeting growing needs | Make way for the zero-litre car | Power sharing | Oil and rising water | Energetic challenges | At a glance: Energy | Competition | Power to the people | Cutting carbon | Winds of change | Power and choice | Rising sun | Give us a wave! | Less energy, more wealth

Complementary articles in other issues:
Issue on Climate and Action December 1998
Issue on Climate change December 1997
Tom Burke: The greening of Goliath (Beyond 2000) June 2000
Domingo Jiménez-Beltrán: Flashing indicators (The Environment Millennium) Sept 2000

AAAS Atlas of Population and Environment:
Climate change
Air pollution