The Greening of the Commission20 February 2010
The new European Commission, appointed after hearings in December, will have strong pro-renewables leanings
The power industry has good reason to pay more attention than usual to the anticipated appointment of a new European Union (EU) energy Commissioner on February 10. Under the newly ratified Treaty of Lisbon, the EU has gained constitutional authority to frame energy policy in general for all 27 member states. So Germany’s Günther Oettinger, nominated as energy Commissioner for the next five years, could become maybe the most influential politician in Europe regarding electricity issues.
In his January confirmation hearings at the European Parliament in Brussels, Oettinger declared that this was indeed his goal: the ‘Europeanisation’ of energy policy.
Moving from the influential post as minister-president of Baden-Württemberg, south-west Germany, he told MEPs: ‘Over the next five years I want to contribute, with you, towards the Europeanisation of our energy policy. We need a comprehensive paradigm shift in energy policy that sees the decarbonisation of the energy supplies and greater energy security.’ Referring to the EU’s new powers, he said they involve a ‘comprehensive legal framework for developing the EU’s energy polices…on three pillars: competitively, sustainability and security of supply.’
How might he use this new authority to impact on the power sector? The key issues of course are reducing carbon emissions and ensuring security of supply, and how the EU might affect the share of renewable energy in the overall supply is critical. Talking about the EU’s current 20%-by-2020 target, Oettinger argued: ‘In the longer run, more would be needed. In the coming years we must start to talk about the decade after the present one.’ He added later: ‘Electricity is the key energy source. A massive expansion of renewable forms of energy is required.’ In a written statement to MEPs, Oettinger amplified his commitment to green energy, saying it was ‘the key energy source in a low-carbon energy mix’.
Additional help to push renewable energies can also be expected from the budgets controlled by the nominated environment Commissioner Janez Potocnik, who stressed in his policy statement that he wanted to promote green innovation. The Slovene told MEPs: ‘It will mean putting in place the right mix of smart regulation, incentives and market-based mechanisms to foster eco-innovation and sustainable consumption and production, finding ways to promote the changes needed which fully respect our levels of environmental ambition.’
And his likely close colleague in the new Commission, Connie Hedegaard, the nominee climate action Commissioner (a new post) is expected to do the same. In her note to MEPs she said one of her top priorities was ‘strengthening competitiveness and creating jobs through low-carbon innovation and technologies.’ She said Europe’s international position would be boosted by combating global warming ‘in a clever way in which climate policy helps create new green jobs, reduces our dependency on foreign oil and gas.’ This would enable Europe to hold its own in a growing green energy market, where ‘the USA and China, for example, will scale-up…’
But of course, green energy – despite a clear priority for the incoming Commission – is not the only answer for reducing carbon emissions. Back to Oettinger’s hearing: was he ready to set an integrated target for low-emission forms of energy, including nuclear energy? Answer – maybe: ‘We also have to talk much more about ‘energy mixes’ in the different regions of the continent, many of which have different possibilities according to their varied resources. The individual member states will remain free to choose their own mix.’
Specifically on nuclear energy, he reflected the agnosticism of his Christian Democratic Union party. At his hearing, he was asked about his position, especially given Austria’s opposition to nuclear energy and French enthusiasm. ‘I see nuclear as a medium term policy. I don’t want to abolish it neither do I wish to make it long term. You could say I’m neutral on the subject. Everyone is free to be either for or against in their own country. I see nuclear as a bridging technology during the next 10 years or so which will give us the space to meanwhile see what the future holds for other energy sources such as solar heating, for example.’ Meanwhile, the EU had ‘a duty to support the safe use of nuclear energy – for instance, by laying down common rules on waste management,’ he said.
Compulsory consumption cuts
Another key issue – and one that has been a key priority for the outgoing energy Commissioner Andris Piebalgs – will be energy conservation and Oettinger was pressed on whether, to help the EU achieve its target of saving 20% more energy by 2010, he should impose compulsory consumption cuts. Oettinger insisted he was opposed. In this context the European Commission last autumn outlined plans under which compulsion could be the order of the day. But the scheme was dropped after strong opposition from Germany and Oettinger said he had no intention of reviving it.
He reminded his interlocutors that 40% of the Union’s energy consumption was tied up in buildings and structures. Better than compulsion, he said, it would be better to concentrate on heating and insulation in the effort to save energy over the next decade.
‘Legal obligation is the ultimate solution and we must first see if our objectives can be achieved in other ways,’ he said, promising in any case to publish an energy conservation plan of action by the end of next year (2011) which would assess the EU’s progress in curbing emissions.
In his note to MEPs, he also wrote that he would ‘promote the introduction of intelligent energy technologies, such as smart electricity meters’, to make consumers more aware of their own energy consumption, boosting energy efficiency and reducing usage.
Another priority for Oettinger is improving EU energy infrastructure. Money should be concentrated on measures which will allow the EU to bring its special continent-wide ‘added European value’ to bear: cross-border projects, economies of scale and combating market failures, he said. And while, he told MEPs at his hearing, it must be recognised that continental networks will not reach all 27 member states, no nation should be isolated either in any future energy structures.
‘The Commission should continue to co-ordinate strategically important projects, such as the plan to connect the Baltic energy networks and the Nabucco gas pipeline. The Baltic states must be fully integrated into the EU electricity and gas network.
‘It should further develop the trans-European energy networks, including in the Mediterranean region and the North Sea. This includes the development of intelligent European networks, a corresponding supergrid and regional connection points,’ he added. ‘We must not seek insular solutions through bilateral agreements,’ stressed Oettinger, soothing words for some eastern European MEPs fearing Germany’s close energy relations with Russia. Oettinger also mentioned the Desertec wind and solar energy project in North Africa, which will also require significant infrastructure development, but warned that it must not become an ‘exploitation of Africa but the start of a new partnership, a win-win situation.’
In a parallel hearing the Commissioner-designate for Taxation, Algirdas Šemeta, was asked if he would propose a carbon tax to reduce greenhouse gas emissions. He was quite certain: ‘The energy taxation directive is one of my first priorities,’ he replied, promising to encourage innovation which will strengthen energy efficiency and environmental protection.
But Oettinger declared himself opposed to such a measure. ‘Fiscal measures are possible,’ he conceded, ‘but given that the unanimity rule applies to taxation, this probably isn’t the best way forward at the moment.’
Looking at the EU’s emissions trading system and its impact on power plants, the climate Commissioner nominee Hedegaard stressed she would be preparing for and managing a review of the system, which must take place by 2015. The Commission would ‘at that stage, assess whether to establish a mandatory requirement for emission performance standards for new large combustion plants’. EU Power plants will, of course already have to buy all emission allowances via auctions from 2013.
Too close to industrial concerns?
Meanwhile, the key figure – Oettinger – was given a rough ride about his close personal relations with leading energy industry figures, friendships he had developed while boss of Baden-Württemberg.
One Green MEP said: ‘It’s an open secret that you have close ties with the CEOs of E.On and RWE’ – an allusion to the implementation of the EU’s single market law such as the third energy market packet on the unbundling of energy companies. Another committee member said she thought he ‘was too close to certain private interests.’
Oettinger replied that he had no shares in energy companies EWF, EnBW, ON, RWE or Vattenfall. ‘I am the Commissioner proposed by Germany but I have European obligations,’ he said.