November 10, 2010 / 2:38 PM / 9 years ago

EU energy chief wants 1 trillion euro network revamp

BRUSSELS (Reuters) - Europe’s energy chief issued a warning over gas and oil imports on Wednesday and unveiled a strategy for investing 1 trillion euros ($1.39 trillion) over the next decade to bolster networks and strengthen solidarity.

European Union Energy Commissioner Guenther Oettinger said the narrow interests of national capitals had prevailed for too long. He asked European leaders to back his plan for unity at the first EU energy summit on February 4.

“Despite serious gas supply crises that have acted as a wake-up call, exposing Europe’s vulnerability, there is still no common approach,” said his “Energy 2020” strategy paper.

“Postponing these decisions will have immeasurable repercussions on society.”

His plea came a day after the International Energy Agency forecast global oil supplies would peak around 2035, when oil prices would exceed $200 a barrel, kicking off a scramble for alternative energy sources.

“The international market for oil supplies could become very tight before 2020, which means that it is important for EU consumers to step up their efforts to reduce oil demand,” said the strategy paper.

But the obstacles to Oettinger’s vision of European unity became clear on Wednesday when it emerged that Germany, his homeland, was lobbying to weaken proposed EU fuel efficiency targets for vans.

Berlin was seeking to protect the commercial interests of national champions Daimler and Volkswagen, an EU source said.

Oettinger called on heads of government to cede control of jealously guarded energy policies and “Europeanize” their approach, in the interests of the EU’s 500 million citizens.

“Over the next 10 years, overall energy infrastructure investments in the EU of 1 trillion euros are needed,” he said. The money would come from taxpayers and energy firms.

One priority is to link the gas and electricity networks of the EU’s 27 countries, so that no single state could be starved of energy as happened when imports of Russian gas via Ukraine were cut for three freezing weeks in January 2009.

“By 2015, no member state should be isolated,” said the strategy paper.

ENERGY EFFICIENCY

Electricity bills will face upward pressure due to huge investments in green energy sources, such as wind turbines in the North Sea or solar panels around the Mediterranean, but that may be mitigated by a determined drive for energy efficiency.

The strategy will be backed up by binding laws on energy efficiency in the years ahead, along with incentives to help homeowners and local authorities renovate draughty buildings to cut fuel bills.

The annual savings could total 1,000 euros per family, according to the strategy paper.

Oettinger said he would soon propose some of the EU’s first binding rules on energy efficiency — forcing public authorities to prioritize the issue when paying for vehicles, services and buildings — an area that accounts for 16 percent of all EU spending or about 1.5 trillion euros.

Green group politician Claude Turmes said the plan showed a “shocking pro-nuclear bias” and did not go far enough to put renewable energy at the heart of EU policy.

The idea of uniting Europe’s infrastructure is not new, nor is that of liberalizing the markets for the gas and electricity that flow through it.

But Oettinger’s commitment to the concept was never guaranteed, given that German Chancellor Angela Merkel, who heads Oettinger’s Conservative party, lobbied hard in 2008 to weaken the legislation.

The Commission has launched more than 40 lawsuits against EU governments for not liberalizing energy markets.

“In London, there was very strong will, but we had less support in other capitals,” Oettinger said.

Progress has also been slowed by a dense web of planning red-tape. Oettinger proposed cutting through that bureaucracy by speeding up permits and sweeping away unnecessary hurdles.

Reporting by Pete Harrison, editing by Rex Merrifield and Janet Lawrence

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