E3G

The EU Strategic Energy Review

By Jennifer Morgan

3. An energy security goal to reduce substantially the overall risks to the European economy resulting from price instability and potential supply disruption in imported hydrocarbons.
Such an energy security goal would address both demand and supply side issues:

a. providing clear metrics of how energy efficiency, renewables and CCS are providing tangible benefits in reducing risks from external energy dependence. This would provide a basis to justify on-going public support and investment in these areas;

b. driving a more systematic and powerful approach to energy diplomacy. This would increase European security through strengthened cooperation with suppliers in Central Asia, Middle East, North Africa and Sub-Saharan Africa to stabilise the impact of hydrocarbon exports on their economies and societies. This would involve targeted assistance and instruments such as the Extractive Industries Transparency Initiative (EITI), and explicitly measure and respond to the long term risks of depending on undemocratic and repressive regimes.

4. A common external energy and climate security policy for Europe is needed to drive global cooperation.
The world will not successfully cooperate to address climate change, if at the same time it continues to compete over dwindling fossil fuel resources. All major consumers have an interest in a predictable, rules-based approach to achieving energy and climate security together, but only a co-ordinated Europe has the weight to drive this process forward through cooperation with China, India, Japan and the USA:

a. The EU should explicitly focus on developing mutual agreement between major energy consumers for a stronger legal underpinning for rules-based, transparent international markets for energy;

b. EU bilateral relationships with major consumers should include stronger measures to increase energy efficiency, and drive forwards the development and deployment of new, efficient and low carbon energy technologies. This would include joint investment programmes and market coordination, not just upstream R&D spending; for example, subsidy removal from high carbon activities, standards harmonisation and tariff reduction. These bilateral agreements are more likely to drive effective and immediate action than the proposed international agreement on energy efficiency.

c. EU R&D spending should be fully integrated into international cooperation on low carbon technologies.

d. Exploration of new regional dialogues; for example, an EU-North Africa dialogue focusing on large scale, low carbon energy development in the region; such as solar thermal. The announcement that six countries in the region have applied to the IAEA to develop nuclear energy for desalination and other development purposes should make this process an EU security priority.