VGB POWERTECH 11 (2019)

A journey through 100 years VGB | VGB POWERTECH 1 (2002)
Supply Security
energy supply. Put more bluntly, it is simply
unsustainable.
Changes
These trends have been going on for a long
time, but several parallel changes make it
more urgent than ever to tackle them.
— First, and most pressing at the moment,
are geopolitical changes. Although oil
markets have not been unusually volatile
over the last month, the so-called war on
terrorism calls for vigilance, both from
policy makers and from energy producers.
— Second, rising demand in developing
countries, linked to economic growth, are
beginning to increase the competition
among our traditional suppliers for fossil
fuels. Even though reserves are not
threatened with exhaustion, there is some
question over the ability of suppliers to
increase their capacity accordingly.
— Third – and it might not have escaped
your attention that my first three points
all relate to external developments more
or less outside of our control – international
oil markets over the past few
years have been far from stable. I do not
need to remind you how important stable
markets are to industry and investment. It
is difficult to predict which way the oil
price will go over the coming months.
Whichever way it moves, it could have a
lasting impact on economic and industrial
strategies.
Within Europe, the future contribution of nuclear,
coal and renewable energy to electricity
generation is also far from clear. Several
member states have announced a moratorium
on nuclear power, others are not
building new capacity to replace plants
coming our of operation. This could leave a
dangerous gap in our power capacity, as well
as drive us towards forms of electricity generation
which produce far more greenhouse
gas emissions. How big this risk is depends
to some extent on how far the market absorbs
renewable energies and how successful we
are in applying clean coal technologies. I
shall come back to this presently.
— Finally, current economic circumstances
are putting pressure on companies’ finances.
This is unfavourable for investment
in energy technology development.
Yet high levels of investment in clean
energy technology are precisely what we
need if we are to maintain our high technological
base in the energy field. We also
need to invest heavily in new technology
in order to reduce our greenhouse
gas emissions and to increase the use of
cleaner renewable energy sources. If, as
some economists maintain, the world
economy is entering a global recession,
then this is not only bad news for energy
technology advances in Europe. It also
acts as a brake on investment in clean
technology in other parts of the world.
As far as electricity is concerned, if demand
continues to grow according to current
trends, we shall need to invest heavily in new
capacity. With demand rising on average by
2% per year in member states, and 3 % in
candidate countries, it is estimated that
600 000 MW will be needed over the next
twenty years to replace power stations
coming out of production and to meet increased
demand. This corresponds to two or
three plants of 1000 MW being constructed
every month for 20 years.
How far can we reduce the need for new
plants? And what sort of plants will we
build? I expect that these and similar questions
will come under the microscope today.
In the European Commission, we do not have
the answers. Each form of energy has advantages
and disadvantages, and these, I am
sure, will be expounded by many renowned
specialists in the course of the next two days.
In our view the key is diversification – that
is, keeping the range of energy options as
wide as possible. But, in a truly liberalised
and open market, it is ultimately consumers
and companies who will take the lead.
Strategic Energy Challenge
More than ever before, the delicate interplay
between energy needs, environmental objectives
and sound economic development is
being put to the test. Yet our future health
and wealth depend on finding the right balance
between these three demands. This is
what I would term the European Union’s
strategic energy challenge. We need to secure
a sustainable energy supply for Europe, one
which will withstand changes to international,
economic and environmental circumstances.
What is at stake is Europe’s future
energy supply.
In the Commission’s view, the size of this
challenge makes it essential for Europe to develop
a sustainable energy strategy, within a
stable long term framework, providing a firm
foundation for Europe’s future role on the
world stage. This strategy should benefit industry,
consumers and the environment alike.
I would now like to elaborate on the approach
we are taking in order to reach this
ambitious goal.
Approach
We are not going to reach our objective overnight.
It will need patience from policy
makers, investment from industry and initiative
from consumers. However, the current
debate on the Green Paper is helping us to
formulate our ideas. And I am happy to share
some of these with you today.
Energy Demand Management
First, we remain convinced that a proactive
approach to energy saving is crucial first step
to developing a sustainable energy supply
policy. Put very simply, each kilowatt saved
equates to at least one kilowatt less which has
to be supplied. It follows therefore that energy
saving can be a direct means of improving
prospects for energy supply. We therefore
see energy saving as a cornerstone of a sustainable
energy supply.
Liberal Markets
A second cornerstone is a liberal and open internal
market for electricity and gas. With
this in mind the European Commission proposed
earlier this year a set of new measures
designed to bring forward the schedule of the
internal energy market, to reinforce the conditions
which encourage real and fair competition,
and to introduce a genuine single
market.
As Mrs de Palacio Vice-President of the
Commission responsible for Energy and
Transport, announced in March 2001. These
new proposals constitute a decisive step towards
providing the people of Europe with
the most advanced and integrated electricity
and gas system, offering the best guarantees
of security of supply and consumer protection
and bringing real benefits in terms of
competition, prices and competitiveness.
Above all, the proposals will create a future
European energy market which offers greater
choice while providing all Europeans with a
guaranteed, high-quality service.
In this way, Europe hopes to avoid the problems
of California, which have largely resulted
from an inadequate legal framework
and inadequate production capacity.
If Europe’s energy supply is to be secured,
our energy markets need to be based on clear
rules and effective regulation. The Commission
is therefore committed to seeing that
links are maintained and developed with all
the main players: producers, network managers,
market operators, consumers and
unions.
In this way, the Commission aims to open up
the gas and electricity markets fully by 2005
for the benefit of European consumers and in
the interests of a more secure energy supply.
Oil Dependence
I mentioned earlier our escalating dependence
on imported fossil fuels. One of the tests
we face is to find ways of reducing this dependence,
or at least to mitigate the risks
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