Yolanda Garcia-Mezquita

Legislating for energy security –
using gggas as an example p
Yolanda Garcia Mezquita
Unit B1- Security of supply & Networks
DG Energy, European Commission
Workshop “EU-UK Energy Security: Perceptions and Realities”
Chatham House, London – 20 th September 2011

SSecurity it of f Supply S l – one of fth the key k
European Energy Policy Priorities
Treaty on the Functioning of the
European p Eunion
New Art. 194 on energy:
Union policy on energy shall aim, in
a spirit of solidarity, to:
.Ensure the functioning of the
internal market;
.Ensure security of supply;
.Promote energy efficiency and
the development of renewable
forms of energy;
.Promote the interconnection of
energy networks
t k
Security of
Supply
Internal market
Objectives:
20 20-20 20-20 20 by
y
2020
Sustainability
2

Role of gas in the EU energy mix and import needs
• Share of gas: in the energy mix 24%, in the electricity mix: 23%
• 500 bcm EU-27 gross inland gas consumption
• EU-27 dependency on gas imports: 64.2% [UK gas import dependency 40%]
•S •Several l MS MSs rely l on a single i l supplier li ffor gas: BG BG, EE, EE LT, LT LV, LV FI, FI RO, RO SK, SK HU
•EU pays 2.5% of its annual GDP to import energy: €270 bn for oil, €40 bn for gas
EU 27 Imports of Natural Gas
Egypt; 2,08%
Nigeria; 2,37%
Libya; 2,88%
Qatar; 4,61%
Other ; 8,99%
Algeria; 14,14%
Source: Eurostat
Russian Federation; 34,24%
Norway; 30,69%
in % (2009, total extra-EU = 13 201 256 TJ)
UK gas import depency 70% by 2025
(%)
90 90,0 0
80,0
70,0
60,0
50,0
40,0
30,0
20,0
10,0
0,0
57,7
Import dependency (%)
Share of gas that needs to be imported to the EU
62,3
75,9
82,8
2005 2008 2020 2030
Source: PRIMES 2009 baseline scenario
Gas
All Fuels

. EU Security of Supply – January 2009 crises
.
Although on the EU level gas supplies are well diversified Central and
European p Eastern countries are dependent p on Russian ggas
in 60-100%
. Different level of preparedness between Eastern and Western countries
The January 2009 crisis made evident the threats of such dependence
and d th the llack k of f adequate d t gas iinfrastructure f t t such h as bi bi-directional
di ti l
physical interconnections in the CEE
% of missing gas supply
from 6 to 20 January 2009
(- 300 million m3 ( 300 million m /day for 14 days)
> 75 %
50 - 75 %
25 – 50 %
< 25%
0%
4

What does the EU do to improve energy
security?
.Enhance better preparedness: EU provides an efficient
legislative framework for infrastructure robustness and
coordinated emergency response – Regulation 994/2010
.Improve interconectivity&flexibility: EU provides funding
and political support for the Projects of Common Interest
– EEPR, TEN-E
» To be streamlined by y the new proposal p p on energy gy
infrastructure to be tabled in Autumn 2011
.Facilitate development of regional cooperation:EU
assists Member States (e.g. BEMIP, North-South
Interconnections, Southern Corridor)
.Enhance E h iinternational t ti l cooperation: ti EU ddevelops l an
external dimension of the EU Policy
5

Regulation EU No 994/2010 on Security Security of Gas Supply
In force since 3 December 2010
.
Based on the lessons learnt from January 2009 gas crisis
Example of f cooperation between EU institutions:
.
Parliament, Council, Commission
MMain i objectives bj ti of f SoS S S Regulation:
R l ti
1) Ensure a high level of protection of customers
2) Strengthen prevention and level of preparedness
3) Enhance flexibility of the gas infrastructure
4) Coordinated response in case of crisis
5) Increase transparency and information exchange
6) Regional cooperation
6

Regulation EU No 994/2010 / on Security S of f Gas G Supply S
.Comprehensive approach on the basis of Lisbon Treaty:
Article 194 ( (2) ) TFEU – internal market, interconnections, in
the spirit of solidarity
.Three-level approach:market, national/regional and EU
level with Union/ regional emergency
.Common EU concept of protected customers
.Sets common binding g standards for ggas
SoS
» N-1 infrastructure standard
» Obli Obligation ti tto enable bl a bi bi-directional di ti l capacity it on all ll
interconnections
» SSupply l standard d d - at least 30 days in severe conditions
.Transparency rules(gas contracts, IGAs, crisis information)

SSecurity it of f Supply S l RRegulation l ti 994/2010
Risk assessment
PPreventive ti AAction ti Pl Plans
Emergency Plans
Consultation between
competent authorities
and Commission
(ENTSOG, NRAs,
ACER)
Published and notified to the Commission
Assessment by the Commission:
• Compliance with EU law
• Solidarity
• Mitigation of risks
Commission can require changes to the Plans
| 8

IMPLEMENTATION O - Regulation EU No 994/2010 / on
Security of Gas Supply
By 3 December 2011
.Risk assessment finalized and notified to the EC
.Notification of protected costumers beyond households (SMEs & essential
social services [max 20% final use of gas], district heating installations)
.Communication of IGAs
.Communication in aggregate form of gas contracts duration >1year
Next steps after December 2011
.Preparation of Preventive Action and Emergency Plans (by 3/12/2012)
.Evaluation of Plans by the EC (3 months)
.Infrastructure standard obligations: reverse flow (proposal by TSOs
3/03/2012; RF capabilities by 3/12/2013), N-1 (by 3/12/2014)

FFocus on infrastructure:
i f t t
Experience from the European Energy Programme
for Recovery
€ 1,000 million
€ 2,268 million
Elect
(€ 905 m)
Gas
(€ 1.36 bn)
€ 565 million
CCS Infrastructure Offshore
Wi Windd
44 projects with commitments of total of 2.268 M€
•Gas interconnectors: 1.285 M€
•Reverse flow: 78 M€
•Electricity interconnectors: 905 M€
€ 146 million
Energy
Efficiency
10

EEPR – Improving gas infrastructure
European Energy Programme for Recovery
* Gas interconnector Czech Republic-Poland
Gas interconnector Slovakia-Hungary
* Gas interconnector Hungary-Croatia
*Reverse gas flow Austria-Slovakia
* Gas interconnector Hungary-Romania
Gas interconnector Romania-Bulgaria
Gas interconnector Bulgaria-Greece

What does the EU do to improve energy
security?
• EU improves diversification of supply: routes, sources
and counterparts (e.g. Southern Corridor, LNG)
Source: European Commission
12

EU
Extension Extension of the EU energy market to to the
neighbourhood The integration of EU gas
networks with the
neighbours will deliver:
Energy Community
Members
Energy Community
Observers
Other countries of the
neighborhood
Source: European Commission
EU neighbourhood policy and Eastern Partnership key elements
• Greater and political
stability y to the
neighbourhood
• Development of transit
countries to stable
economies and rule of law
• Development of Southern
Eastern gas markets:
• Investment
opportunities
• Contribute to Caspian
and Middle-East
development
13
European Council calls for a new partnership with North Africa and the Middle East

Priorities for 2020
Priorities for 2020 and beyond
Priorities beyond 2020
Electricity
Highways
CO2 transport
network
14

Thank you for your attention!
http://ec.europa.eu/energy/security/gas/gas_en.htm

BBack-up k slide lid – courtesy t of f ENTSOG
ENTSOG

N-1 N 1 standard
by Member States and EU
N-1
300%
250%
200%
150%
100%
50%
0% DK GR DE BE SK AT PL NL LV CZ EE ES IT HU FR UK RO SE LU PT BG SI LT IE FI EU
Normal EERP