EU seeks to expand energy grids

Business Materials 13 November 2008 18:39 (UTC +04:00)

The European Commission has unveiled plans to diversify the EU's energy imports and reduce dependence on Russia, the main gas supplier, reported BBC.

The EU will remain dependent on imported fossil fuels for many years to come, the Strategic Energy Review says.

Some member states "are overwhelmingly dependent on one single supplier," the document says, without naming Russia.

It urges the EU to develop energy infrastructure in the Baltic states and the Mediterranean region.

It also wants the EU to build a North Sea offshore grid, to link up national electricity grids in north-western Europe and plug in the numerous planned offshore wind farms.     

"It should become, together with the Mediterranean Ring and the Baltic Interconnection project, one of the building blocks of a future European supergrid," the strategy paper says.

A Mediterranean energy ring - interconnecting electricity and gas networks - "is essential to develop the region's vast solar and wind energy potential," it says.

Currently imports account for 61% of EU gas consumption - and 42% of those imports come from Russia. By 2020, the commission says, gas imports are expected to grow to 73% of consumption.

So another priority is to get firm commitments from gas suppliers in the Middle East and Central Asia, including their involvement in gas pipeline construction.

"A southern gas corridor must be developed for the supply of gas from Caspian and Middle Eastern sources, which could potentially supply a significant part of the EU's future needs," the commission says.

The proposals will be considered by EU governments and the European Parliament, who have to sign off specific EU projects.

Presenting the package on Thursday, EU Commission President Jose Manuel Barroso said energy prices had risen by an average of 15% in the EU in the last year alone.

"We must break the vicious energy cycle of increased energy consumption and increased imports," he said.

One way to do that is to stick to the EU's green energy goals, contained in the climate change package, he said.

Meeting the targets on renewables and energy efficiency would cut EU energy imports by 26%, he predicted.

He also highlighted the total reliance of eight EU states on Russia for their gas as "a problem we must address". He was speaking on the eve of EU-Russia talks in Nice, France.

"We must shield European citizens from the risk that external suppliers cannot honour their commitments," he said.

A gas price war between Russia and Ukraine in the winter of 2006 disrupted gas supplies to some EU states.

"Stronger solidarity is also essential in boosting interconnections inside the EU, so that member states can help each other out in tackling shortfalls.

"And we need a more common approach with third countries. If we can't have a single voice as Europeans we must at least have a single message," Mr Barroso said.

The recent volatility in oil and gas prices underlines the need for more transparency in member states' data on energy stocks, the commission says.

It wants data on commercial oil stocks in the EU to be published weekly. Data on member states' strategic oil stocks is already published by the EU.

The commission does not call for obligatory strategic gas stocks, saying they are at least five times more expensive than oil stocks.