Together is better in EU energy union


November 12, 2014

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This week, European energy ministers gathered in Brussels to talk about the EU energy market and how to boost use of renewables.

Ministers plan to unveil proposals in early 2015 for how to develop a more unified energy network. Forming an ‘energy union‘ is one of the EU’s priorities for the rest of the decade. The idea is to unite national grids and help even out energy prices across Europe.

It is also intended to help energy security, by reducing dependence on Russian fossil fuels; and enable nations to make use of excess power generated by sources including wind farms. It’s a big brief.

New EU energy commissioner Miguel Arias Cañete is leading on this plan and, in theory, it sounds positive for wind farm investors.

A unified energy system would vastly increase the area in which they could sell excess power from their schemes; and support new projects. This is why the European Wind Energy Association has been such a keen backer.

But it is highly complex to iron out disparities in energy prices, regulations and subsidies in 28 countries with competing priorities.

Added to this, the European Commission has already admitted that the €5.8bn in EU funds dedicated to connecting networks is only 3% of what is required. So we are still a long way off the EU being able to realise its aim of an energy union.

This is why EWEA this week spelled out five steps the EU needed to take to turn this vision into reality. These included backing stable national energy policies in member nations, which EWEA says is vital if European nations are to attract the €1trn they need by 2020 to upgrade transmission interconnections between countries.

It has also called on the EU to grow investment in wind technology by European firms through using grants, loans and risk guarantees to facilitate wind investment. Establishing an accelerator scheme to prioritise renewable energy’s technological growth is also key.

And encompassing all of this, in EWEA’s view, is the need for the EU to establish an energy supply and diversification action plan.

That last point is among the most important.

Such a plan would ensure that future interconnectivity goals are met by 2020; would enable a tougher line to be taken on carbon pricing and perhaps most important; and would ensure that wind energy plays a more central role in planning for the future.

While it’s easy to dismiss the Brussels debate and while there is no guarantee that EU policymakers will commit to it, the discussions this week cannot afford to be ignored.

For investors too, increasing efforts to achieve a European energy union should provide some reassurance. With half of the EU’s nuclear capacity set to expire within a decade, the race to become the future energy generation kingpins has only just begun.

Time then, for the wind industry to step up and take the stage.

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