IEA, EU future major challenges: energy security, industrial competitiveness and sustainability
The 2014 Energy Policies report by IEA provides some key recommendations to the European Union to overcome future energy & climate challenges
In taking stock of the European energy policies since 2008, the Agency recognizes the incredible strides which have been made by the European Union over the past five years, reaching energy and climate goals for 2020 well in advance than expected, by reducing greenhouse gas emissions by 19.2% and increasing the share of renewable sources destined to energy consumption (mainly solar photovoltaic and wind power) by 14.1%.
However, in its report, IEA highlights how the progress that has been made so far by the European Union is not actually sufficient to meet the far greater challenges facing it, such as energy security, industrial competitiveness and sustainability.
At continental level, the EU is going through a strong economic and financial crisis, which has led to a reduction in energy demand and in oil and gas production, which resulted in an increase in imports and reduction of energy security. In addition to this, the EU has lost its leadership in terms of global industrial competitiveness, to the benefit of emerging markets, such as North Africa and the Middle East.
What is certain is that the European Union continues to boast one of the the most stringent regulations worldwide in terms of climate & energy.
This is the reason why IEA, though confirming the current European global leadership in the fight against climate change and transition to a "green" economy, however, makes a number of recommendations and actions to strengthen the internal energy market, energy security and industrial competitiveness.
Despite the liberalization applied to the market and the price collapse, there still are important deficiencies in the EU in terms of interconnections and energy policies for a decarbonised economy.
An efficient European Energy Union, with rules to regulate the energy market and effective policies to support the development of low-carbon technologies, has not yet been created.
The new 'must’ provided by IEA to the European Union can be summarized as follows:
• Reconfirm its commitment to a fully functioning internal energy market, implementing continental regulations with actions such as the integration of regional electricity markets and the stabilization of renewable energy;
• Establish legal structures and governance in view of the 2030 Framework for Climate & Energy, for a low-emission economy by 2050 and giving priority to market-based instruments by:
o Developing and periodically reinforcing regional requirements for the renovation or construction of efficient energy buildings, in the areas of lighting, transport and technologies for air conditioning;
o Managing the system of energy subsidies and reducing the distortionary impact of public intervention;
o Reforming the system for trading greenhouse gas emission allowances quickly;
o Implementing policies to attract investments in low-carbon technologies, including renewables, nuclear power and carbon capture and storage;
o Regularly assessing EU social and economic progress in terms of competitiveness, safety and sustainability;
o Strengthening cooperation in Europe to improve the management, safety and service life of nuclear installations and radioactive waste, ensuring adequate incentives in those states that want to keep the nuclear option as part of their energy supplies;
o Ensuring adequate energy funding and regularly monitoring the results of energy programs on the basis of specific indicators for competitiveness and innovation.