Energy consultant and associate fellow at the Centre for European Reform Stephen Tindale reviews the output from the first ever European Union energy summit, held this month in Brussels.

European Council President Herman van Rompuy called heads of European Union (EU) governments to his first energy summit on 4 February. This was billed as an energy summit, but because it occurred during the on-going Eurozone crisis and faster moving events in Egypt, politicians spent most of the time talking about these issues rather than energy.

In the conclusions, largely drafted before the summit, the following point was made: “Over the years, a lot of work has been carried out on the main strands of an EU energy policy, including the setting of ambitious energy and climate change objectives, and the adoption of comprehensive legislation supporting these objectives.”

Well, all observers and participants would agree that there has been a lot of work. And many would agree that the EU has set ambitious energy and climate change objectives – the EU is, after all, very keen on targets and timetables.

The 20 per cent renewables target by 2020 is quite ambitious, though it can certainly be met. The 20 per cent greenhouse gas reduction target, again by 2020, may have seemed ambitious before the recession, but is not now because of the decline in economic activity. It should be increased to 30 per cent.

The 20 per cent energy savings target by 2020 is also ambitious in that the EU is on track only to deliver half of it, though with strong and sensible policies the energy savings potential is far higher.

Much of the debate from non-government organizations and journalists in the run-up to the summit focused on whether the energy savings target should be made legally binding, as the other two targets already are.

Binding targets obviously have greater impact than aspirational ones, but they do not guarantee delivery. The summit did not agree to make the energy savings target binding, but said it would consider doing so in 2013 if insufficient progress had been made.

The EU should not spend too much time or political capital arguing about whether the energy savings target should be made binding. Instead, it should use its new energy efficiency action plan, due out in early March, to tighten up existing laws, and spend more of its existing budget on energy efficiency programmes.

The EU should tighten standards for the use of energy in buildings, electronic appliances and cars. It must also focus on combined heat and power (CHP). Europe wastes massive amounts of energy because most power stations do not capture and use the heat they produce when they generate electricity.

The Commission said after the summit that it would consider making Best Available Technology (BAT) mandatory for the authorization of new energy generation capacity and renewal of existing installations. The BAT approach is of course open to considerable definitional debate yet CHP technology is clearly available and cost-effective, so it should be made mandatory on new capacity.

The heads of government spent most of their (reduced) discussion time on energy supply rather than energy efficiency. Unfortunately this was entirely predictable as energy efficiency is not seen as sufficiently politically ‘sexy’.

The Commission said the internal market for energy should be completed by 2014 – another target and timetable. It had previously set the target date of completion as March 2011.

The summit did better on renewables. The Commission had been calling for an EU-wide feed-in tariff, but this was rejected in favour of greater harmonization of existing schemes – an approach pushed in particular by the German government. An EU-wide system is unnecessary and inoperable; different countries have differing renewables potential. Regulatory uncertainty increases the cost of capital for developers; endless debate about a Europe-wide feed-in tariff would do this, just as the endless debate in the UK about the renewables obligation versus the feed-in tariff has done for developers.

Of course, one of the main reasons why the UK has harnessed so little of its enormous renewable potential is land use planning. The summit’s conclusions said: “It is important to streamline and improve authorization procedures, while respecting national competences and procedures, for the building of new infrastructure”.

This is basically just a nod towards a very important issue. But there is nothing the EU can do about land use planning approaches because planning decisions are made by member states.

It can do more about cross-border infrastructure such as electricity grids. These are essential for the harnessing of Europe’s full renewables potential, so that electricity can be transmitted when, for example, the wind is blowing in the north and the sun is not shining in the south.

Grid extension is necessary, but will not be cheap. The debate about the EU Budget from 2013 to 2020, which is likely to dominate EU politics for many months to come, was not on the agenda at this summit. But subsequently senior Commission officials said that some of the money for agreed European projects should be raised via EU project bonds – a sensible idea.

The summit conclusions said little about fossil fuels. They did say Europe’s potential for sustainable extraction and use of conventional and unconventional fossil fuel resources like shale gas and oil shale should be assessed. There has been a lot of assessment of conventional fossil fuels, but not enough of unconventional ones, including the full lifecycle carbon footprint of shale gas, so it is welcome that the EU has at least recognized the need for full assessment.

Overall, the summit was satisfactory, but not nearly as good as it should have been given the urgency of climate control. The Commission’s action plan on energy efficiency, due out in early March, must therefore be the start of much more rapid progress.

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