LETTERS TO THE EDITOR

Spring 2010

by Herbert Reul

Another key element of a sound energy strategy will be to limit growth in demand. Energy efficiency in the building sector, for example, offers huge
potential savings

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Sir,

William Martin and Jonathan Gillman were right to point to that last winter’s gas supply crisis as a reminder that energy security must be tackled effectively and urgently. Unlike them, however, I believe that the institutional structures already established in Europe worked remarkably well. Regional cooperation and the concerted action of companies in all EU member states, as well as the diplomatic efforts of the European Commission, all contributed to solving the crisis, and very few gas customers suffered disruptions in supplies. Gas companies also made concerted efforts to redirect gas flows to affected regions. Most of these actions were successful, including measures to reconfigure pipelines and install reverse flows.

The 2008-09 crisis certainly did demonstrate where additional action is needed. Diversification of transport routes – and, possibly, suppliers – is clearly required in some regions of Europe, mainly the countries of former Yugoslavia where pipeline interconnections are lacking. Building pipelines, developing storage sites and constructing LNG terminals is a job for energy companies, however, not the EU. The EU’s role is to concentrate on helping companies to overcome administrative and political burdens and barriers to trade. The completion of the internal energy market, for example, will greatly enhance security of supply by guaranteeing third-party access to storage sites and pipelines. This is a much more practical way forward than for the EU to stockpile gas. Financially viable projects will come from the private sector. Public contributions such as those granted under the economic recovery programme should remain exceptions.

Martin and Gillman correctly highlight the importance of maintaining a broad energy mix. The latest generation of efficient nuclear power plants will contribute to EU energy security by decreasing our dependence on imports, and several member states are already planning or constructing new facilities. Others, however, face particular constraints. Nuclear power is not an option for Austria for legal and historic reasons, while the new German government will prolong the lifetime of at least some nuclear power stations but so far rules out constructing new plants.

I fully agree with Martin and Gillman over the necessity to be careful with subsidies for renewable sources of energy. They should not distort markets for decades. Germany is a good case in point: we have installed ten times more wind power generators than the UK, even though Britain has a much longer coastline, and many more solar panels than all southern European countries. This is not an effective allocation of funds at the pan-European level.

Another key element of a sound energy strategy will be to limit growth in demand. Energy efficiency in the building sector, for example, offers huge potential savings.

Martin and Gillman criticise the shortcoming of the EU’s approach to energy. Yet our energy policy has come a long way in recent years and further legislation is in the pipeline. These measures have largely been advanced in the name of limiting climate change and completing the internal market. It is evident, however, that Europe’s energy security will benefit too. Perhaps it’s time we shifted the focus of debate away from the environment and the internal market, and emphasise the energy security aspects of our policy rather more.