EPRS Strategy By / September 29, 2017

EU energy policy [What Think Tanks are thinking]

Faced with uncertain energy demand, volatile prices and possible disruptions to supply, the European Union is pushing ahead with efforts to fully integrate its still fragmented energy market. The aim is to boost economic growth, foster innovation, ensure stable supplies and protect the environment.

© Stuart Miles / Fotolia

Written by Marcin Grajewski,

Energy Policy Plug In Socket Shows Utility Guide 3d Rendering
© Stuart Miles / Fotolia

Faced with uncertain energy demand, volatile prices and possible disruptions to supply, the European Union is pushing ahead with efforts to fully integrate its still fragmented energy market. The aim is to boost economic growth, foster innovation, ensure stable supplies and protect the environment. The planned construction of the Energy Union is taking shape with the ongoing adoption of numerous policy proposals, such as those contained in the ‘Clean Energy for All Europeans‘ package of 2016. Most recently, the European Parliament adopted new rules on the security of gas supply.

This note offers links to a selection of recent commentaries, studies and reports, from some of the major international think tanks and research institutes, which discuss EU energy policies. More papers on the topic can be found in a previous edition of ‘What Think tanks are Thinking’ published in December 2016.

Energy Union

Proper Energy Union governance is essential to delivering the EU’s Paris Agreement promises
E3G, June 2017

The role of integrated national plans in building an Energy Union
Friends of Europe, June 2017

Efficiency first scorecard: Is the EU’s energy union on track?
E3G, June 2017

The European Energy Union: A chance for France
Notre Europe, May 2017

Securing the Energy Union: Five pillars and five regions, Southern Europe
European Union Institute for Security Studies, March 2017

Towards the Energy Union: The BEMIP and the case of Lithuania
Istituto Affari Internazionali, January 2017

Implications of Brexit

Brexit’s impact on energy markets: Brexit and security of supply for the UK and Ireland
Oxford Institute for Energy Studies, September 2017

Brexit and energy: Time to make some hard choices
Centre for European Reform, September 2017

Review of EU-third country cooperation on policies falling within the ITRE domain in relation to Brexit
Bruegel, July 2017

Staying connected: Key elements for UK–EU27 energy cooperation after Brexit
Chatham House, May 2017

Brexit scenarios: The implications for energy and climate change
E3G, April 2017

Security of supply

US Sanctions: No conflict, no Nordstream threat, an opportunity for greater EU-US cooperation
Centre for European Policy Studies, August 2017

The EU competition investigation into Gazprom’s sales to Central and Eastern Europe: A detailed analysis of the commitments and the way forward
Oxford Institute for Energy Studies, July 2017

Is Europe too dependent on Russian energy?
Carnegie Europe, July 2017

Nord Stream 2 will divide EU, new US sanctions will do more harm
Clingendael, July 2017

Nord Stream 2 means gains for Germany but pain for Europe
Bruegel, June 2017

EU external energy policy in natural gas: a case of neo-functionalist integration?
Zentrum für Europäische Integrationsforschung, June 2017

Energy, Russian influence and democratic backsliding in Central and Eastern Europe: A comparative assessment and case studies from Belarus, Ukraine, Moldova, Hungary, Romania
Expert Group, National Endowment for Democracy, May 2017

Is the EastMed gas pipeline just another EU pipe dream?
Bruegel, May 2017

The Kremlin’s gas games in Europe: Implications for policy makers
Atlantic Council, May 2017

Natural gas demand in Europe in the next 5-10 years
Oxford Institute for Energy Studies, May 2017

The discursive construction of Turkey’s role for European energy security: A critical geopolitical perspective
Istituto Affari Internazionali, March 2017

The EU antitrust case: No big deal for Gazprom
Bruegel, March 2017

Turkey’s role in natural gas: Becoming a transit country?
Energiewirtschaftliches Institut an der Universität zu Köln, January 2017

Energy transition, infrastructure and climate change

Reinforcing the EU energy industry transformation: Stronger policies needed
Bruegel, September 2017

European gas markets: Key trends
Oxford Institute for Energy Studies, September 2017

Does the EU renewable energy sector still need a guarantees of origin market?
Centre for European Policy Studies, July 2017

Shaping (not just surviving) the future of energy
European Union Institute for Security Studies, July 2017

The future is now: European Union finances for climate and energy
E3G, July 2017

Improving cooperation among EU Member States in handling electricity crises: Lessons for the regulation on risk-preparedness
Centre for European Policy Studies, July 2017

EU ETS: Fasten your seat belts
Oxford Institute for Energy Studies, July 2017

The long journey to end energy poverty in Europe
European Policy Centre, June 2017

Making the energy transition a European success: Tackling the democratic, innovation, financing and social challenges of the energy union
Notre Europe, June 2017

Oil: The missing story of the West’s economic and geopolitical crises
Sheffield Political Economy Research Institute, June 2017

Cutting Europe’s lifelines to coal: Tracking subsidies in 10 countries
Overseas Development Institute, May 2017

The carbon buyers’ club: International emissions trading beyond Paris
Bruegel, April 2017

Global energy architecture performance index report 2017
World Economic Forum, March 2017

The future of electricity: new technologies transforming the grid edge
World Economic Forum, March 2017

Clean energy for all Europeans: Time to deliver!
Notre Europe, March 2017

Balancing reserves within a decarbonized European electricity system in 2050: From market developments to model
Deutsches Institut für Wirtschaftsforschung, March 2017

Adversity and reform: Ukrainian gas market prospects
Oxford Institute for Energy Studies, March y 2017

Channelling progress in Central and South East European energy market integration
Centre for European Policy Studies, March 2017

Managing the resource curse: Strategies of oil-dependent economies in the modern era
Carnegie Endowment for International Peace, March 2017

Energiearmut bekämpfen: Instrumente, Maßnahmen und Erfolge in Europa
Friedrich Ebert Stiftung, March 2017

Fulfilment of national objectives under the Renewable Energy Directive: State of play and projections
Centre for European Policy Studies, February 2017

Energy in the German-Polish relationship: Acknowledging controversies, pursuing shared interests
Stiftung Wissenschaft und Politik, February 2017

Energiewende: From Germany’s past to Europe’s future?
Atlantic Council, February 2017

The EU-China energy cooperation: An institutional analysis
European Institute for Asian Studies, February 2017

Composition and drivers of energy prices and costs: Case studies in selected energy-intensive industries
Centre for European Policy Studies, January 2017

Enhancing regional renewables cooperation in the EU
Heinrich Böll Stiftung, January 2017

Prosumage of solar electricity: Pros, cons, and the system perspective
Deutsches Institut für Wirtschaftsforschung, January 2017

The new EU energy package: Towards more decarbonization and more complexity
Egmont, January 2017

Green growth and energy security
Clingendael, January 2017

The clean energy transition and industrial strategy: Developing a coherent approach
E3G, January 2017

EU energy policy: 4th time lucky?
Oxford Institute for Energy Studies, December 2016

Read this briefing on ‘EU energy policy‘ on the Think Tank pages of the European Parliament.

Related Articles
  • In the context of Brexit and Energy, you may be interested in a Public lecture that I gave at the University of Nottingham in June this year.

    The following is a copy of the blog post I wrote (I will send a copy of the full PowerPoint presentation to your email address):

    BREXIT and Energy

    On 23 June 2016, when the UK electorate voted on the subject of staying in or leaving the European Union (EU), it is extremely unlikely that many – if any – took into account the possible impact of a so-called BREXIT on the UK’s energy supply. This was hardly surprising as it was only one of many issues that would eventually need to be reviewed, discussed and negotiated during the months and years ahead. Like most of these issues, it is something of a specialist area (usually the domain of “experts”) that was not raised or debated by the proponents or opponents. However, it is an issue that can – and almost certainly will – have some impact on the lives of the people in the UK and elsewhere.

    When I gave a lecture on the subject at the University of Nottingham on 20 June 2017, it was only one day after the start of the EU-UK negotiations on a BREXIT agreement, so it was too early then to get any sort of impression as to where the negotiations would lead – or if energy issues would be raised during their earlier stages. Unfortunately, the future is still no clearer and energy, like many other issues, has still not made it to the table.

    Having been involved in various aspects of energy forecasting at different stages throughout my career, I am always very reluctant to get out the crystal ball and to try to predict any sort of future. I am certainly not going to do so now. However, earlier this year, the Economic Affairs Committee of the House of Lords concluded that “Security of supply should be the first and most important consideration in energy policy”. In my view, the closer the UK remains to the EU’s Internal Energy Market, then the greater the security of its energy supply and the less the likelihood of any future supply disruptions or unexpected price fluctuations. This is not to say that there would not be supply disruptions and unexpected price fluctuations within the EU, just that the Member States would be better protected against them than a country outside the EU.

    Though most people – in fact, a large majority of people – would agree with the House of Lords that security of supply is the most important consideration for energy policy, there are two other major elements – the environment, in particular decarbonisation, and affordability. BREXIT could have a significant impact on both these elements.

    I am pleased to say that the UK has been very much in the vanguard concerning decarbonisation of the energy sector in Europe. The EU’s Energy and Climate Policy was a direct response to a UK proposal made to the European Council meeting held at Hampton Court in 2005. Since that date the UK has continually pushed for accelerating the shift to a low carbon economy and was one of the first countries in the World to legislate against new, unabated coal-fired power plants. As a result, people could expect that BREXIT would not slow down the UK’s decarbonisation efforts. However, there are growing concerns in some quarters that the delays in the growth or introduction of new sources of electricity generation could mean some “relaxing” of the country’s decarbonisation objectives, especially if it ceases to be a member of the EU’s Emission Trading System (ETS). Another possibility is that it might reduce requirements for future environmental impact assessments (EIAs) or strategic environmental assessments (SEAs). Such changes, in addition to reducing environmental protection, could have a negative impact on the ability to trade with the EU.

    The UK is now an important importer of energy in spite of the continuing production of oils and gas from its areas of the North Sea. The majority of such trade with the European Economic Area (EEA) is in fossil fuels – in particular oil and gas. The largest single supplier of crude oil is Norway. At the same time, the UK actually exports crude oil to both Belgium and Germany. Norway also supplies over 60% of our natural gas imports with most of the remaining imports coming in the form of liquefied natural gas (LNG) from Qatar. The UK also exports some natural gas (equivalent to around one-third of imports), mainly to Belgium and Ireland. There is also a well developed trade with some EU States on oil products – such as transport fuels

    While the UK is still the second largest coal producer in the EU, it still imports around three-quarters of its requirements. Most of this originates outside the EU – Russia, Colombia and the USA. There is also some limited trade in electricity, with imports from France and the Netherlands and exports to Ireland, and in certain renewable energy sources (biomass and biofuels) drawn mainly from outside the EU. If the UK withdrew from the EEA as well as from the EU, it would be distancing itself from its main supplier of oil and gas. This is not to say that the price to be paid for the fuels would change or that tariffs would necessarily be imposed on the UK’s exports to the EU or its imports from the EEA. However, that option would be there if governments wished to raise extra revenue or protect other producers/suppliers. This would likely have an impact on prices to the energy consumer. Concerning trade on energy and energy products from outside the present EEA, it is clear that because of its economic muscle, the EU is better placed to negotiate than any stand alone country.

    In recent months there has been considerable debate about the Euratom Treaty and BREXIT. Of course, withdrawing from the Euratom Treaty would mean that the UK no longer has to meet that Treaty’s requirements or that of legislation developed and adopted under that Treaty. However, the UK does have a lot of its own legislation that reflects many aspects of the Euratom Treaty. For example while it would not be covered by Euratom Safeguards or monitored by EU inspectors, it would still be covered and monitored by those of the International Atomic Energy Agency (IAEA). In addition, while it would not have to meet the requirements of the EU’s Safety and Radioactive Waste Directives, it would still be a member of the IAEA’s equivalent Nuclear Safety and Radioactive Waste Conventions. How much the withdrawal from the Euratom Treaty would impact on nuclear trade, for example in medical sources used for radiation therapy, or on the future construction and operation of new nuclear facilities would very much depend on future negotiations and the development of UK’s legislation.

    There is one other very important issue that has not yet been touched on in this blog, but is very much at the forefront of the EU-UK negotiations, the situation of Ireland. While energy has seldom, if ever, been mentioned in this context so far, it is very important. Ireland is dependent on imports for between 80% and 90% of its energy. Furthermore, close to half of its electricity is generated from natural gas – 96% of which is imported from the UK. Since 2007, there has been a Single Electricity Market (SEM) for the whole of Ireland and the grid is connected to the UK’s national grid. The impact of BREXIT on these arrangements and on the energy situation in Ireland have yet to be fully evaluated.

    This blog has done little more than scratch the surface of the impact of BREXIT on energy and, in particular, energy policy in the UK. Concerning the future – even the short term -there are very many unknowns and imponderables. Politics and energy policy are not easy bedfellows! However, I would return to the view I expressed earlier that the closer the UK remains to the EU’s Internal Energy Market then the greater its security of supply and the less the likelihood of future supply disruptions or unexpected price fluctuations . Unfortunately, achieving this after BREXIT would not be easy.

    Professor Derek M. Taylor
    Geo-Energy Research Centre
    University of Nottingham

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