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First Vijverberg Session. Netherlands Chapter. Two sides of the same coin? Securing European energy supplies with internal and external policies Christian Egenhofer & Arno Behrens Centre for European Policy Studies ( CEPS) Brussels. The Hague, 20 May 2008.
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First Vijverberg Session Netherlands Chapter Two sides of the same coin? Securing European energy supplies with internal and external policies Christian Egenhofer & Arno Behrens Centre for European Policy Studies (CEPS) Brussels The Hague, 20 May 2008
A European external energy policy to address energy security and other energy challenges? • Necessity/possibility? • Preconditions • EU policy options • 10 questions … to provoke discussion
Content • Introduction • Current external energy policy • Energy chapter in Lisbon treaty • Limitations of coordination • What concept of security of supply? • The role of the internal energy market • Russia • One voice • Preconditions and options for a common external energy policy • 10 questions
State of EU external energy policy (II) • Energy security is now part of EU foreign policy as it was not a few years ago • Does not go beyond the familiar notion of ”Europeanisation” (projecting the EU’s values externally) concept of a ”European security of supply policy” is missing • EU stuck in coordination, partnerships ... ?
Does Lisbon Treaty make the difference? (III) • New energy chapter is overdue – fuel mix subject to unanimity (what does this mean?) • Open questions: solidarity mechanism will need to be fleshed out, ”moral hazard”, who pays? • Stronger Commission role in ”disciplining” member states ?
Better coo-ordination (IV) • European Council sticks to traditional EU role of coordination • But signs of change become visible (Network of energy correspondents ...) • Role of periodic ”Strategic Energy Review”?
What is security of supply ? (V) • With market liberalisation (”globalisation) government role has changed • Are governments responsible for securing energy supply at affordable prices – or should they set a framework to minimise risks? “Securisation” or not? • Disagreement still ongoing? Poland? Other member states?
The role of the internal market ? (VI) • Member states disagree on exact features masking disagreement on the role of markets • Economic rents are at stake • Moral hazard issues • Does more integration do away with gas security issues?
Russia (VII) • Russia’s dominant role and the failure to bind Russia into a partnership • Only Russia to blame? • Bilateral gas supply deals make a lot of sense • EU preaches interdependence but reacts in a neurotic way … • The role of markets • Mandil’s prescription – mix of internal and external policies
Speaking with one voice (VIII) • Speaking with one as the mantra … but what can Europe say if there is no agreement? Ask Mr Solana … • If Europe agrees, it can act – trade, climate change • “Mr/Ms Energy” risks duplication of structures, bureaucracy, infighting • Lisbon Treaty will help but will take time • Is there a way around EU consensus-building ?
Preconditions and options (IX) • EU will need to develop a regulatory framework (including market design) that reflects security of supply considerations • Financing issues are on agenda (“security of supply does not come for free”) • Need for common understanding of security of supply government intervention (securisation?) or framework?
Preconditions and options (IX)(Cont’d) 4. In transition to true internal market, need for a stronger Commission (watchdog) role 5. If EU is serious about “interdependence” , need to develop the concept 6. Impacts of EU and global climate change policy on Russia will need to be recognised • No way to get around EU consensus-building if the EU is to speak with one voice understood and EU will need to develop a regulatory framework
10 questions (X) • What is a EU security of supply concept? • What shape of an emergency strategy? • What are regulatory conditions for an internal energy market that addresses security of supply? • Will member states accept a stronger Commission role? • What does interdependence mean? • How to finance EU solidarity measures? • Does Europe need a European Grid Operator and/or a European Regulator? • To what extent can markets address the Russia question? • How to recognise the impacts of global climate change policy on Russia’s interests? • Will member states live up to ambitions of the climate/energy package?
CENTRE FOREUROPEANPOLICYSTUDIES christian.egenhofer@ceps.eu arno.behrens@ceps.eu Place du Congrès 1 B-1000 Brussels T: +32 2 229 3911 F: +32 2 219 4151 www.ceps.eu