EU energy chief says supply system unsustainable
Date: 11-Feb-02
Country: NORWAY
Author: Erik Brynhildsbakken
"There are inherent weaknesses in today's energy supply system which render it unsustainable," Palacio told the ongoing Sanderstoelen annual oil and gas conference in Norway.
Palacio said growing demand for fossil fuels such as oil and gas would make it hard for the Union to meet its obligations to curb greenhouse gas emissions that are blamed for global warming, and called for more diversity in supply.
"It also threatens to make Europe, in the longer term, increasingly dependent on supplies from distant regions," she added.
Palacio said the Union must aim to develop energy from a wide range of power sources from renewables to nuclear generation.
"I fully respect the reasons why some member states have not adopted or would prefer to withdraw from the (nuclear) option," Palacio said. "However, in some parts of Europe, renouncing the nuclear option could leave a dangerous gap in our power capacity."
Palacio said the EU aimed to double the share of renewable energy to 12 percent by 2010 compared to the current six percent and substituting 20 percent of traditional fuels in road transport with alternative sources by 2020.
EU LOOKS TO NORWAY, RUSSIA
Non-EU Norway is closely linked to the Union through a special European Economic Area agreement which gives it access to the internal market, and Palacio forecast that the oil-rich country would increase its total oil and gas exports to the EU.
"Today, Norway provides about one quarter of our gas imports and one fifth of our oil imports. Within 10 years, this proportion could rise to almost one third of total oil and gas imports," she said.
Petroleum resources in Russia and the Caspian basin were "especially promising" with the needed investments in infrastructure, Palacio said, adding that the EU worked on several schemes with Russia and former Soviet states to bring more oil and gas from east to west.
"It will serve both to enhance the security of energy supplies across our continent as well as helping to develop, in practical terms, the concept of a Common European Economic Area," she said.
The EU aims to fully open its energy markets by 2005 to lower prices, but the liberalisation drive has suffered several set-backs as some countries such as Germany and France have been slow to adopt market-based policies and network access for outside competitors remain difficult.
"Ultimately, what I would like to see is a common standard throughout the EU on this issue, ensuring network tariffs are fixed and published and that they are verified by an independent regulator," Palacio said.
Transmission and distribution companies should be run separately from generation and sales, even if ownership remained within a single group holding, Palacio said.
