Can the EU Form an Energy Union?

February 26, 2015 By Karen Henry

power lines russia Energy ManageThe European Commission has submitted various proposals to bring together the energy systems of member states into a single “energy union,” The Guardian reports. Among other benefits, an energy union could provide cost savings, greater energy efficiency and greater energy supply resilience in the face of threats and other emergencies.

The technology to achieve an energy union is mostly available, although it is not implemented. Large-scale interconnectors and pipelines could be built to carry electricity and fuels across long distances, better energy storage hardware could be designed, and the software needed to make smart power grids and manage energy demand could be created.

However, it may be easier to overcome the technological aspects than the political ones. Many energy companies are still state-owned, and some member states see control over energy supply — and to some extent prices — as vital to national policy. The commission’s proposals must balance national sensitivities; for example, avoiding the impression that a proposal would dictate how states organize their energy mix. Price is another issue. Energy companies would be more apt to accept a proposal that allows them to cater differently to national markets with a wide range of pricing structures to maximize profits.

While proposals to do things such as give the EU’s Agency for the Cooperation of Energy Regulators (ACER) power over national regulators or pass legislation for a ‘new European electricity market design’ to reconcile tensions between the markets and incentives for renewables and capacity might be appealing, the Green Party and environmental groups are concerned about the emphasis on fossil fuels. They say that there must be clear and consistent prioritization of clean energy over fossil fuels.

EU energy ministers will discuss the Commission’s plan in Brussels in early March and again in mid-April before taking a position at the Luxembourg energy council in June.

Photo via Shutterstock.

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