ENERGY DEPENDENCY In 2018 the energy dependency rate in the EU was equal to 58%, meaning half of the EU’s energy needs were satisfied by foreign producers. Considering the vulnerability of a dependent energy market, how should the EU ensure a stable and resilient energy market without depending on net imports? Submitted by Frederik Reiff, (DE) |
TOPIC AT A GLANCE
KEY STAKEHOLDERS
KEY CONFLICTS
POLICIES APPROACHES TO THE PROBLEM
WHAT NOW?
FUTHER LINK
KEY STAKEHOLDERS
KEY CONFLICTS
POLICIES APPROACHES TO THE PROBLEM
WHAT NOW?
FUTHER LINK
TOPIC AT A GLANCE
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KEY STAKEHOLDERS, CORE CONCEPT & KEY TERMS
CORE CONCEPTS & KEY TERMS The Energy Dependency Rate shows the percentage of the total energy consumption that the economy must import. An energy dependency rate above 100% indicates the storage of energy products while an energy dependency rate below 0% implies net exports. Projects of Common Interest (PCIs) are key cross-border infrastructure projects that link the energy systems of EU countries and boost the use of renewable sources ensuring that secure, clean, and affordable energy reaches all citizens. Liquefied natural gas (LNG) is natural gas that has been converted to liquid form for ease of storage and transport. Possibility to transport it over long distances resulted in more possible suppliers of natural gas. As of 2019, 25% of the natural gas imports are imported as LNG. |
KEY STAKEHOLDERS The European Commission is the executive branch of the EU responsible for proposing legislation and implementing decisions. It is in charge of increasing energy efficiency, both for environmental purposes and advancing energy security. In 2013, the European Commission published a report on the financial support for energy efficiency in buildings. Russia represents the main supplier of imported oil and gas in Europe. As of 2019, 28% of the imported oil and 44.7% of the imported gas came from Russia. As much as the EU relies on Russian energy, Russia is dependent on the revenues generated in Europe. Over half of the Russian government's revenue comes from the sale of fossil fuels. (1) The Energy Efficiency Financial Institutions Group (EEFIG) was established by the European Commission and the United Nations Environment Programme Finance Initiative (UNEP FI) to accelerate private finance in energy efficiency both through policy design and market-based solutions. (1) Fossil Fuels: coal, oil and natural gas |
KEY CONFLICTS
BECOMING LESS DEPENDENT ON SPECIFIC SUPPLIERS VS BECOMING LESS DEPENDENT IN GENERAL
One of the major approaches to ensuring a resilient energy market is the diversification of supplier sources. Diversifying the trading partners and becoming less dependent on countries like Russia is an effective measure to increase the security of the energy market. When many actors can only import small volumes of energy into the EU, cut-offs or shortages wouldn’t have severe consequences, as the missing capacities could easily be compensated by other actors. The energy system would therefore be more secure to both cut-offs due to natural or technical origins as well as intentional cut-offs. While the dependence on some specific actors would decrease, the diversification will not lower the overall energy dependency rate. The EU would still be dependent on the situation of the worldwide energy markets. The conflicting approach to increased security would be lowering the energy dependency rate through other measures. |
HARM OR HARMLESS?
If the EU has the ambition to lower its energy dependency rate it needs to reduce its energy consumption and/or increase its internal energy production. Reducing the energy consumption through measures like increased energy efficiency of buildings fits very well into the plan of the European Commission to make Europe climate neutral by 2050. However, increasing the internal energy production by using fracking (2) or burning more coal harms the climate. Other measures combatting energy dependence, like nuclear energy or additional pipelines to diversify the suppliers also come with environmental risks. One might argue that it is acceptable to implement measures that have an impact on the environment when at the same time measures are implemented that help the environment. Others argue that ignoring one problem to solve the other and climate protection and the resilience of the energy systems should go hand in hand. (2) Fracking: a method of getting oil or gas from the rock below the surface of the ground by making large cracks in it |
USING FRACKING TO DECREASE THE DEPENDECY
A method to increase oil and gas production is to drill for unconventional hydrocarbons like shale gas or oil. To extract shale gas, it is often necessary to use fracking. Fracking may not be commercially viable for many more years, coming with severe ecological risks like the contamination of drinking water or the emission of greenhouse gases. Nonetheless, it can be a strategy to increase internal energy production and reduce the dependency on others. |
POLICY APPROACHES TO THE PROBLEM
INCREASING THE INTERCONNECTIVITY
The European Commission aims to increase the interconnectivity of the European energy nets to achieve higher flexibility to react to shortages or changes in demand. Interconnectors connect different gas, oil or electricity markets. The EU aims for a 15% interconnectivity rate of electricity in Europe by 2030. That means that each country would be able to transport 15% of their installed electric power production across its borders. The European Commission included several interconnectivity projects in their fourth list of PCIs, making them eligible for funds from the Connecting Europe Facility (CEF)
INCREASING THE CAPACITY TO IMPORT LNG
Both the European Commission and Member States invest in LNG infrastructure. The European Commission recognizes LNG as crucial to diversifying the natural gas supply thus increasing energy security. In recent years The LNG-imports from the United States have increased, with further potential. Many LNG projects are Projects of Common Interest thus receive funding from the EU.
SAVING ENERGY BY INCREASING THE ENERGY EFFICIENCY
In 2012, the European Parliament and the Council of the European Union passed a directive to increase the energy efficiency of the EU to reduce the overall EU energy consumption of primary energy to 1483 million tons of oil equivalent (mtoe) and final energy to 1086 mtoe by the end of 2020. The Measures under the directive included the renovation of federal owned buildings, minimum energy efficiency standards, and the preparation of National energy efficiency action plans (NEEAP) by the Member States. In 2018 the Council and the European Parliament passed an amending directive as part of the Clean energy for all Europeans package with the energy efficiency goals for 2030 set to overall energy consumption of 1128 mtoe in primary energy and 846 mtoe in final energy. The European Commission is expected to further amend the directives under the European Green New Deal.
The European Commission aims to increase the interconnectivity of the European energy nets to achieve higher flexibility to react to shortages or changes in demand. Interconnectors connect different gas, oil or electricity markets. The EU aims for a 15% interconnectivity rate of electricity in Europe by 2030. That means that each country would be able to transport 15% of their installed electric power production across its borders. The European Commission included several interconnectivity projects in their fourth list of PCIs, making them eligible for funds from the Connecting Europe Facility (CEF)
INCREASING THE CAPACITY TO IMPORT LNG
Both the European Commission and Member States invest in LNG infrastructure. The European Commission recognizes LNG as crucial to diversifying the natural gas supply thus increasing energy security. In recent years The LNG-imports from the United States have increased, with further potential. Many LNG projects are Projects of Common Interest thus receive funding from the EU.
SAVING ENERGY BY INCREASING THE ENERGY EFFICIENCY
In 2012, the European Parliament and the Council of the European Union passed a directive to increase the energy efficiency of the EU to reduce the overall EU energy consumption of primary energy to 1483 million tons of oil equivalent (mtoe) and final energy to 1086 mtoe by the end of 2020. The Measures under the directive included the renovation of federal owned buildings, minimum energy efficiency standards, and the preparation of National energy efficiency action plans (NEEAP) by the Member States. In 2018 the Council and the European Parliament passed an amending directive as part of the Clean energy for all Europeans package with the energy efficiency goals for 2030 set to overall energy consumption of 1128 mtoe in primary energy and 846 mtoe in final energy. The European Commission is expected to further amend the directives under the European Green New Deal.
WHAT NOW?
There are two kinds of approaches to a less dependent energy market. Ones that aim at increasing the resilience through diversification and less dependence on the biggest thus most powerful suppliers of energy. The other kind of approach aims at reducing the energy dependency rate by reducing the energy used or increasing the energy produced. These two are not mutually exclusive, both can be a part of the solution.
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FURTHER LINKS
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