Report: COM(2008) 782 - Green Paper Towards a Secure, Sustainable and Competitive European Energy Network

Introduction from the Green Paper

Europe's energy networks are the arteries on which we all depend for the energy to fuel our homes, businesses and leisure. The EU's energy policy sets out clear goals and objectives (20% reduction in greenhouse gas emissions, 20% share of renewable energy in EU final energy consumption and 20% improvement in energy efficiency by 2020) for sustainable, competitive and secure energy. The renewable energy and climate change package of January 2008 will commit Member States to ambitious renewable energy and emissions reductions targets. However, the EU will not achieve its ambitions unless its energy networks change considerably, and fast.

Today, Europe's energy networks - that is, the infrastructure to transport electricity, gas, oil and other fuels from producers to consumers - are aging. They are based on traditional fossil fuel supplies, and large, centralised production, with cheap and plentiful energy. The lack of suitable network links is a barrier to investment in renewable energy and decentralised generation. The enlarged EU has inherited poor east-west and south-north connections. This makes it more difficult for energy to move freely around the EU and makes some regions more vulnerable to supply disruption. With energy imports set to rise under almost all scenarios, new import routes are urgently needed to give the EU greater flexibility in its supplies.

Reflecting widespread concern about the ability of Europe's energy networks to deliver the energy which Europe's citizens need, on 16 October 2008 the European Council called on the Commission to reinforce and complete critical infrastructures.

Recent events in Georgia have also shown that this is a critical time for energy security and that the EU needs to intensify its efforts with regard to the security of energy supply. It has always been assumed that energy networks would be self-financing. To achieve this a clear and stable legal framework is the main precondition for stimulating private sector investment in generation and transmission/transport. Creating this framework is one of the principal aims of the energy and climate package and the third internal energy market package on the completion of the internal gas and electricity market.

The third internal energy market package, once implemented, will introduce significant changes in network planning, including rules on unbundling, regulatory coordination and new collaborative networks bringing together transmissions system operators. These should stimulate investments, synergies, efficiencies and innovation in energy networks.

However, in view of challenges to security of supply and the scale of the investments which Europe's energy networks need, the EU needs to reinforce its policy on energy network development. It should for example be able to intervene or mediate where public and private parties are unable to move forward on key projects with a European impact. It should also review its funding framework, notably Trans-European Networks for Energy (TEN-E), to direct it better towards policy goals. Planning and authorisation difficulties must also be addressed.

This Green Paper seeks views on how the EU can better promote the new energy networks which Europe needs, using all the instruments at its disposal, notably but not only TEN-E. It also suggests a number of major strategic projects which the EU could promote to strengthen solidarity and security of supply in a truly European energy network.