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EU hearing: renewables, single market and efficiency

Binding targets for the share of renewables in EU energy supplies, building a single market in energy, and enhancing energy efficiency were among the issues debated at an EP Energy Committee hearing of experts in Brussels on Tuesday.

This was the first such hearing since the European Commission tabled its „energy package” proposals on 10 January 2007. MEPs and experts welcomed the approach inherent in the Commission's proposals. Energy Commissioner Andris Piebalgs pointed out that this approach was broadly backed by the four Council meetings that had discussed the proposals so far (Foreign affairs, Energy, Environment and, informally, Economy and Finance).
These Council meetings had revealed broad support for a 20% cut in CO2 emissions by 2020, for widening support for energy efficiency and for sharpening the EU's focus on energy research and development. Views differed, however, at the hearing as well as in Council, on whether targets should be binding, on the appropriate instrument for unbundling energy transmission from generation and supply, on nuclear energy, and on the EU's external energy policy.

„Binding targets are the key issue of the energy package”
The EU should avoid setting too many objectives, and instead focus on what is important, advised Göran Svensson, Vice President Vattenfall AB, adding that a roadmap is needed to give clear policy signals. This view was echoed by Commissioner Piebalgs, who felt that „a binding target for renewables is the only way to proceed” and that this would be the „key issue” in showing „how serious we are”. We have „no chance to retreat on this issue, without it the energy package is not able to deliver”, he stressed to MEPs and experts. By contrast, Károly Gerse, Senior Deputy Chief Executive of the Hungarian Power Companies Ltd. (MVM), advised against setting EU targets unilaterally.
Instead, the EU should agree future targets at international level, he said, adding that he did not support the idea of setting binding targets for different industry areas, either. „The right answers to all these questions are given by the EP's reports on this subject during the last two years”, commented Oliver Schäfer on behalf of the European Renewable Energy Council (EREC). To increase the share of renewable energies used for heat generation to 25 % in 2020, the Commission should propose a directive in this area similar to the existing one for power generation, he said.

Efficient energy and energy savings: „The only thing missing is our ambition”
Energy efficiency is the key tool for tackling security of supply, sustainability and competitiveness simultaneously, said Dr Helmut-M.Groscurth from Energy and Carbon Consulting - and MEPs and other speakers agreed. „We must uncouple economic growth from energy consumption”, pursued Dr Ulrike Baumgartner-Gabitzer of Österreichische Elektrizitätswirtschafts-AG (Austrian Electricity Industry Corporation).
This entails better informing the general public about energy-efficient uses and energy forms as well as introducing special stimuli such tax incentives, he said. Yet there is the potential for 50 % energy savings even with the existing tools, underlined Andrew Warren, senior advisor to the European Alliance of Companies for Energy Efficiency in Buildings (EuroACE ). „The only thing missing is our ambition”, he said.

A functioning single energy market through total ownership unbundling?
Opinions differed on which instrument to choose to achieve a clear unbundling of the ownership of production and transmission facilities. „Liberalized markets should play an important role but cannot solve every problem”, said Dr Groscurth. Commissioner Piebalgs favored total ownership unbundling, pointing out that it appeared to be working well in those countries that had already taken this step. Olivier Löbel of UEAPME, the European Association of Craft, Small and Medium-sized Enterprises, also advocated complete ownership unbundling, but meanwhile recommended using price caps to prevent monopoly suppliers from exploiting small and medium sized enterprises.
Competition on energy supply grids can never be complete, and regulation will always be necessary, although „one day this could possibly be the task of the cartel office” and not a specific regulatory authority, said Klaus-Peter Schultz of the German Federal Network Agency. In some cases, pan-European regulation is needed to solve problems such as security of supply and the use of alternative energies, said former director general of Czech energy transmission grid Ludmila Petránová, who proposed that a European Operations and Coordination Center could be located in Prague. (EP Press)