Green groups slam Commission over energy security package

New European Commission proposals to increase the security of electricity supplies have been savaged by environmental groups for encouraging centralised generation and ignoring climate change constraints.1 The Commission has sought to sugar the pill with a sister proposal containing mandatory energy efficiency targets and measures to encourage energy services.2

Energy security, always a central theme of energy policy, shot up the political agenda in 2003 following power cuts in the US, Italy and the UK.

The Commission's legislative package is largely a reaction to these events. It comprises a proposed Directive aimed at increasing security of electricity supply, a Decision revising guidelines for trans-European electricity and gas networks, and a Regulation on gas transmission networks.

The proposals include passing references to encouraging energy efficiency, renewables and embedded generation. For instance, Member States must ensure that investment decisions for electricity networks "take into account" the need to connect renewables. Remarkably, however, none of the documents on energy security even mentions climate change - indicating that that it did not feature as a strong consideration when the proposals were being drawn up.

The central thrust of the measures is to encourage network reinforcement, more centralised generation and cross-border trade in electricity and gas.

The security of supply package was accompanied by a draft Directive on energy efficiency. This would oblige Member States to adopt a mandatory target to achieve annual energy savings equivalent to 1% of energy - defined as electricity, gas, heating fuel, coal and transport fuels - sold to customers for each year between 2006 and 2012. The public sector must make a higher contribution, with a subsidiary 1.5% target.

Savings for each year would be calculated from the baseline of consumers' average consumption in the five preceding years. Only savings resulting from measurable energy efficiency programmes, energy services and other "measures" would count towards the targets.

EU energy consumption has been growing by 1-2% per annum since 1986. The targets do not preclude further growth, but they are designed at least to slow it down.

However, a loophole in the proposal allows savings from existing schemes to count towards the 1% per annum target, provided that they were not initiated before 1991. In the UK, for example, this suggests that savings from programmes such as the energy efficiency commitment and climate change agreements might make a 1% energy saving target seem rather undemanding.

Potentially more significant is an obligation on Member States to remove barriers to energy services - which bundle together energy supply tariffs and energy efficiency measures - and ensure that suppliers offer such packages. The UK Government has recently announced a two-year experiment to remove one regulatory barrier (see pp 49-50 ).

Under the proposal, suppliers must also offer free energy audits to their customers if fewer than 5% have signed up to energy services, while governments must ensure that energy services are offered to all eligible customers, including small businesses.

The proposal acknowledges "some degree of uncertainty" in measuring energy savings - and says that "as far as economically feasible" the savings should be verified by a third party.

Environmental group WWF welcomed the energy efficiency proposals as "a good step in the right direction", and called for their speedy implementation. However, it argued that the targets were too weak and flexible - and pointed to a recent Commission Green Paper on security of supply which found a potential for cost-effective energy efficiency improvements in the EU of 18%, with the technical potential for a 40% improvement.

In contrast, the security of supply package provoked a hostile reaction. Friends of the Earth dubbed it "a dinosaurs' charter" - and claimed that the energy efficiency proposal was introduced at a late stage as "mere window dressing".

"The facilitation and support of envisaged massive investments in new power stations and interconnection lines are in contradiction with attempts to reduce demand growth," WWF said. "It's like trying to promote cycling on a six-lane highway."

Instead, WWF called for "softer" proposals based on energy efficiency and clean technologies. "Promoting decentralised power production as an alternative to huge interconnected grids needs to be considered carefully as an option before rushing into virtually irreversible decisions on long-term investment that could harm both security of supply and the climate," it warned.

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