Energy Policy in the European Union

A European Union for Renewable Energy
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Advanced search. Skip to main content. Subjects Biodiversity Energy policy. Rent or Buy article Get time limited or full article access on ReadCube. References 1. Article Google Scholar 2. Article Google Scholar 3. Google Scholar Download references. Rights and permissions Reprints and Permissions. About this article. Nature Research menu. Search Article search Search. Newsletter Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing. Close banner Close. However, the primary means of meeting its objectives—reduction of emissions using the Emissions Trading Scheme ETS , increased energy efficiency, be the number one in renewables—may be vulnerable to weaknesses in implementation strategy as well as to tensions with the goals of energy security articulated elsewhere in the same Framework Strategy.

Specifically, energy efficiency is intended to be the foremost renewable energy transition strategy, but progress on implementation has been limited by the poor functioning of the marketplace supporting the ETS, due in part to the non-binding nature of its targets Nichols Inability to meet energy efficiency goals thus hampers the ability of renewable targets to offset reliance on fossil fuels as a source of energy security, ensured by the Directive on minimum reserves of crude oil or petroleum products Official Journal of the European Union [OJEU] Recent events namely Brexit, the change on climate policy brought by the election of Donald Trump as president in the USA, and the agreement of the Organisation of Petroleum Exporter Countries OPEC to reduce production to keep oil prices high, may compound any internal stresses within the EU energy policy framework, potentially shaping its direction going forward.

The research questions to be answered then become: Is the EU energy policy consistent and forward-looking? Can the Energy Union really fulfil its aims? What impact may events have on EU energy governance? The framework overlooking the analysis builds around the concept of governance see for instance Kolher-Koch and Rittberger and the different actors participating in EU energy policy governance.

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Discourse analysis has been used for the study, with sources including official documentation from the European institutions, reports from interest groups and energy experts, and the views publicly expressed by different actors, reflected mainly in interview transcripts appearing in press articles, press releases, and public speeches. The analysis shows that among the three events under scrutiny, Brexit is the one with the highest likely influence over EU energy policy governance; insofar, it will change the actors participating in the process and the composition of the institutions.

The following section will summarise the current political environment in the EU and member states and its link with energy policy developments. It will be followed by three sections covering each of the three identified events, finishing with concluding remarks. Recent years have witnessed a convulsed environment across the EU for a variety of reasons. The recovery from the economic crisis has left countries rebelling against austerity measures that had disturbing social costs Oxfam ; Caritas Europa ; ESAD The refugee crisis, caused by the war in Syria and other instability movements in the Middle East, revealed lack of solidarity in some countries Chappel ; Sherer Indiscriminate jihadist terrorist attacks took place in cities across several member states Hanrahan and Wang Scepticism about the unity of the EU and the pursuit of further integration has existed in various degrees for some time, more visibly since the rejection of the EU Constitution in by France and the Netherlands Lubbers and Scheepers However, aforementioned circumstances have heightened this Euroscepticism, resulting in unsettled political regimes France, Netherlands, Austria and particularly in the United Kingdom UK in the vote to leave the EU taken on June Issues cited above led to demonstrations pro and against migration and refugees, and anti-austerity in several cities across EU member states.

Politicians needed to react to these citizenship voices, and the results of electoral processes taking place in may have been influenced by what appears to be a new focus on national issues, instead of wider transnational integration. This interaction or protest reaction can be seen as an increasing participation of civil society in EU governance Finke with differentiated results across countries.

In Germany, the tone of the discourses in the electoral process of turned clearly to national concerns, even when talking about climate-related topics. Feed-in premiums; net metering; subsidies and tax exemptions; loans; subsidies and tax regulation for heating. Tax relief scheme; subsidies and tax regulation mechanism for heating; new measures expected Premium tariffs; net metering; tax regulation mechanisms; tenders; price base mechanisms; loans.

Premium tariff; loans; net metering; tax regulation mechanisms; same except net metering for heat. Quota system; tenders; loans; subsidies and tax incentives; subsidies and loans for heat. Quota system green certificates ; subsidies; subsidies for heating; financial support for new installations producing renewable electricity finished at the end of Quota system; subsidies and tax regulation mechanisms; tax exemption for heating. Loan; quota; tax regulation mechanisms; loans and price-based mechanisms for heating. Unless otherwise stated, the instruments listed for each country are applicable to electricity.

The Commission set out the guidelines to move from fixed tariff rates to feed-in premiums from onwards European Commission , considering wind and solar technologies mature enough to face market competition and existing subsidies as distortion of the internal market. This move has been criticised for being driven by the big energy companies and their lobbying groups Nielsen In fact, latest reports highlight both historical and still existing government support of fossil fuels, particularly coal, in the member states Ecofys , even if said reports also mention the support given to renewables through different public policy interventions.

Lobbying activities by energy companies are well known, and evidence seems to indicate that fossil fuel companies have been more successful in their contact with authorities and dedicate considerable amounts of money to ensure their voice is heard ahead of relevant decision-making processes. Examples can be found at country level, where for instance Shell had meetings with ministers in the UK and BP had 79 meetings, between and , totalling more than twice the meetings that Green groups Greenpeace and Friends of the Earth had with ministers during the same period Evans et al.

Most fossil fuel companies are multinationals: their activities go beyond the EU context and there is evidence of their influence in the USA. Something similar seems to have happened with the energy efficiency and renewables targets for After multiple rounds of negotiations and conflicting positions, the potential gains that could come from the promotion of energy efficiency were outweighed by the fears of a negative impact on the European ETS.

Increased energy efficiency would mean reduction of emissions, which would translate into lower needs to acquire emission permits, making their price go down and subsequently making the purpose of the market redundant. This is an indicative and not a binding target, which leaves member states without individual targets. It thus weakens the possible outcomes of any measure. Some authors consider the election of binding or indicative targets irrelevant and depending on government priorities cost-containment or effectiveness in deployment Mir-Artigues and Del Rio However, the indicative nature of the targets involves no sanctions if they are not reached, and enforcement options would be softer Lafferty and Ruud On these grounds, the approach taken has been criticised openly by green industry and climate groups Nichols The decision was made under the pressure of the increasing tensions between Russia and Ukraine, which is significant as there were fears of disruptions in energy supply, as it had previously happened.

A united position was sought even if was not as ambitious as it would be desirable. There was a view of possible modifications occurring after the Paris Summit in Jacobsen and Crisp in order to make the targets more ambitious, but in the aftermath of the Summit, no mention was made of such possibility. This was celebrated by the fossil fuel lobby and gives room for the UK to provide even higher subsidies to fossil fuel companies after Brexit Hope But this is in line with the national concerns of other member states over the potential job losses in the coal sector, namely Germany and Poland.

If the concept of governance is understood as the interaction of public and private actors to engage in policy formulation Heritier , the examples abovementioned with regard to lobbying could be used to argue that, with regard to energy policy, fossil fuel companies may have had advantage to get their points of view upheld in front of the European institutions.

This poses questions about the legitimacy of the governance framework, if the provision of information is asymmetrical and only elites have access to the institutions Hauser It also indicates that national priorities are influencing the decision-making process at EU level. The main concern with regard to Brexit has to do with the resources available for sustainability projects, given that the UK has been providing a substantial amount of the EU budget, but also given that EU resources have funded many environmental projects in the UK House of Commons The UK is a net contributor to the EU budget.

Its contribution was 18, This accounts for However, it is clear that, for the next Multiannual Financial Framework, changes would need to be made, as otherwise there will be a gap in the finances. There are several options for these adjustments Chomicz : 1 Adjust the budget size counting on which programmes the UK may continue to be part of and paying to. This fact, added to the uncertainty of the negotiation results, makes the first option, adjusting the budget in line with the new pool of contributions, extremely complex, even though it would be more accurate and the size of the adjustment smaller.

The second option is quite controversial, possibly facing resistance from those member states that currently contribute the most to the rebate France, Spain, and Italy—EC d. Making budget cuts in all areas in a proportional way may seem fair and relatively simple, but it bears the risk of leaving sensitive areas without enough funding. This takes us to the fourth option of assigning levels of priority to different policy areas and cutting the funding of those with the lowest priority.

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Although the European Union has legislated in the area of energy policy for many years, the concept of introducing a mandatory and comprehensive European. Read about EU energy policy. Fact Sheets provide an overview of European integration and the role of the European Parliament.

Again, though feasible, this too can be controversial: It poses questions about who is going to decide, and how the levels of priority will be defined. If environment and sustainability are negatively affected, which may be a possibility given the lowering of the profile that issues such as climate change are taking in the political arena Simms , this can impact the funding for energy projects that try to address climate change and sustainability-related problems. Europe could end up with a watered down Energy Union Strategy. It will also affect the Commission composition, and there will be one fewer country making decisions.

One party less in a negotiation theoretically should lead to decisions being made more quickly, but what if the parties left at the discussion table have more polarised positions?

The UK is considered a big country within the EU. Some had already warned before the referendum Rayner that Brexit could put the EU efforts to reduce carbon emissions at risk.

Energy Policy in the European Union | SpringerLink

Reduced funding will compromise the money that Eastern European countries have been receiving from the ETS auction schemes to adapt their energy systems Khan , so their transformation to less polluting energy supplies could be at risk. With regard to energy interconnections between member states, Brexit could have significant impacts.

The remaining EU members will focus on building stronger interconnections between them, with doubts over political support from those remaining members to have greater interconnections with the UK. Since the UK depends on energy imports, it will be in its interest to take part on interconnection projects, but for the remaining members, their priority would be those countries that are still part of the EU.

However, Ireland would be at the end of pipes that have to cross the UK. It is possible that energy interconnections between Ireland, the UK, and the rest of the EU will be part of the negotiations of the future relationship of the UK with the EU. Given the fact that the issue of the border with Northern Ireland is already proving controversial, there is uncertainty about what the future may bring for energy security of supply, particularly for Ireland.

On a positive note, there are also arguments saying that the EU will improve its renewable energy outlook without the UK, since the country is far behind its targets for whilst other member states are making significant progress Lycetts All in all, Brexit is causing uncertainty, so it is difficult to assess to which extent there will be a positive or negative impact from the energy governance perspective.

European Union Energy Market Liberalisation

However, given the slow progress observed on the Energy Union roadmap EC b , with status reports based on data mostly related to EC c , it seems that was almost a lost year with regard to the necessary steps to achieve the desired targets. In a globalised world, what happens in one country can have impacts elsewhere. Given the traditional energy dependency of many Western countries, this is particularly true concerning issues related to climate change and energy. Before the last US election November , some already warned of the possible consequences for climate and energy policies of a Trump win.

A few months later, he decided to withdraw the USA from the Paris Agreement Selin creating a generalised distrust in the USA with regard to multilateral cooperation. The EU has been firm in its criticism of the new US position, but what can this actually mean in practical terms? There have been radical calls within Europe to isolate the USA and stop any re-initiation of transatlantic trade talks Martin Schulz, candidate in the German elections , the rationale being that as the USA is not assuming the costs of fighting against climate change, it would create competitive distortion, so no additional market access should be granted Livingston and Brattberg It has become apparent that the USA is losing the leadership role in the fight against climate change that it had taken from Europe after the failure of Copenhagen in On one hand, it has made visible the commitment of both China and the EU to work together, and strengthen their relationship Selin Areas in which the USA and the EU can work together even in this environment have to do mainly with energy security, as it is in the US interest that Europe reduce its energy dependence from Russia.

Regarding attempts for cleaner energy, there can be possibilities of cooperation on nuclear and, given the preference for coal of president Trump, on carbon capture and storage. The latter is less likely though, since the EU is still committed to getting away from coal, despite the maintenance of coal subsidies previously mentioned, and the investments in Carbon Capture and Storage CCS have not been completely successful Livingston and Brattberg The main driver pro-renewable energies in the USA are state-led policies rather than federal ones, so in the short term, there should not be too many changes Landis-Marinello ; Fitfield States have authority over the siting of energy projects, they have the ability to create renewable portfolio standards and have been doing so, and there have been multistate efforts to promote renewable energy and address the impacts of climate change.

It appears clear that the focus of a majority of states is on continuing with the benefits that the promotion of renewables has been providing, even if there is no support from the central administration. In the long term, however, the removal of the Clean Power Plan can make things change Divva Reddy, from Eurasia Group in Crisp as it would take out of the picture a long-term vision for a low-carbon economy in the USA.

This could be an opportunity for Europe to regain the leadership in renewables, which the Energy Union is calling for. This could have been a possibility in the past, but it is doubtful in the current environment, given that the manifesto of the Conservatives in the last election Conservatives did not mention renewables and specifically supported shale gas.

Since European energy imports from the USA are limited, the behaviour of the USA may not have a big impact on the diversification of energy imports as part of the Energy Union plan.

The European Union energy transition: key priorities for the next five years

Therefore, even if Trump plans to stop shale gas exports in the future, the focus of the EU would still be to build bigger interconnection between member states. The UK can be affected more strongly Simon Virley in Crisp since its fossil fuel reserves are in decline and are supportive of shale gas. So in theory, it could be interested in receiving imports. Thus, it could try to reach individually an agreement with the USA on this area, once Brexit becomes a reality. However, given the fact that in the future the action from the biggest emitters will be fundamental, it is more likely that the world will look at how China behaves.

This can have ramifications in other diplomatic areas. The decision was seen with scepticism given the traditional incentives that individual countries have had in the past to breach the agreements. At this time, things look a bit different and the agreement has been kept and in fact extended until , after a decision from Saudi Arabia and Russia in May Reed OPEC had recognised that part of its problems to keep prices up and thus stable profits was related to excess of supply OPEC , so the decision in November was trying to balance inventories Razzouk et al.

Low prices of oil had been acting as a disincentive for investments, so there were fears that, in the medium term, lack of investments would result in lack of supply and excessive prices as observed in previous oil crises OPEC The problem now comes from the fact that prices are barely going over the threshold supposed to be enough to boost investments. There are three main reasons for the current situation Reed : Firstly, predictions over oil reserves that push prices up are made assuming constant increases in demand, but currently demand is either not growing or not doing it as quickly as desirable IEA Secondly, linked to the decrease in demand, is the surge of electric vehicles.