A ten-point action plan sets out a series of ambitious targets on greenhouse gas emissions and renewable energy, along with proposals to create a more competitive energy market across the economic bloc, and includes a report on the implementation by the Member States of the internal market for gas and electricity as well as the results of an enquiry of the state of competition; a plan of for priority interconnections to create a European grid; proposals to promote sustainable power generation from fossil fuels; a roadmap and other initiatives to promote renewables, and; an analysis of the situation of nuclear energy in Europe.

Based on the three central pillars of: a true internal energy market; accelerating the shift to low carbon energy; and energy efficiency, the mainstay of the new policy is a core objective for Europe to reduce greenhouse gas emissions by 20% by 2020 with the aim to increase this target to a 30% reduction by 2020 and 60-80% by 2050.

As part of its energy policy, the European Commission has adopted a Communication on how to sustainably generate power from fossil fuels with a focus on coal, along with technologies for carbon capture and storage. The EU intends to establish “a favourable regulatory framework for the development of these novel technologies,” as well as invest more in research. This year the Commission will begin to design a mechanism to stimulate the construction and operation by 2015 of up to 12 large-scale demonstrations of sustainable fossil fuel technologies in commercial power generation in the EU.

The Commission has also announced that it believes that by 2020 all new coal-fired plants should include CO2 capture and storage technologies and existing plants should then progressively follow the same approach.

The binding target of 20% of overall energy sourced from renewables by 2020 will require a massive growth in electricity, biofuels and heating and cooling, the EU says, with a minimum target for biofuels of 10%. In addition, a 2007 renewables legislative package will include specific measures to facilitate the market penetration of both biofuels and heating and cooling. Each Member State will be allowed the freedom to determine the best renewable energy mix for its own circumstances but will be required to establish National Action Plans outlining specific objectives and sectoral targets for each of the renewable energy sectors of electricity, biofuels and heating and cooling.

The policy document followed the release of figures showing that the EU is almost on track in reaching its 2010 renewable electricity target of 21% of all electricity generated. Latest figures from the bloc show that the overall share of renewable electricity will reach 19% by 2010.

The European Union will also increase by at least 50% its annual spending on energy research for the next seven years and the Commission will annually invest approximately €1 billion between 2007 and 2013 in energy technology research and innovation, preparing the first European Strategic Energy Technology Plan in 2007 as part of this policy. As a first step in the right direction the Commission’s view is that the increased budgets for energy research and innovation of the 7th Framework Programmes – 50%, from €574M/year to €886M/year – as well as of the Intelligent Energy-Europe Programme – 100% to €100M/year – for the period 2007-2013, Member States and industry should at least match this commitment.

Regarding nuclear energy, the Commission has made it clear that it is for each member state to decide whether or not to rely on nuclear electricity. However, the Commission also recommends that where the level of nuclear energy reduces in the EU “this must be offset by the introduction of other low-carbon energy sources otherwise the objective of cutting greenhouse gas emissions will become even more challenging.” The document adds: “To meet the expected energy demand and to reduce European dependency on imports, decisions could be made on new investments or on the life extension of some plants.”

The package proposed by the Commission also includes an objective of saving 20% of total primary energy consumption by 2020 through stringent new energy efficiency standards, promotion of energy services, and specific financing mechanisms to support more energy efficient products. The plan emphasises the considerable potential for reducing losses in the generation, transmission and distribution of electricity with proposals for targeted instruments to improve the efficiency of both new and existing generation capacity and to reduce transmission and distribution losses.

EU energy commissioner Andris Piebalgs said: “If we take the right decisions now, Europe can lead the world to a new industrial revolution: the development of a low carbon economy. Our ambition to create a working internal market, to promote a clean and efficient energy mix and to make the right choices in research and development will determine whether we lead this new scenario or we follow others.”

Environment commissioner Stavros Dimas added: “On current projections, energy and transport policies would mean that rather than falling, EU emissions would increase by around 5% by 2030. With current trends and policies the EU’s energy import dependence will jump from 50% of total EU energy consumption today to 65% in 2030. In addition, the internal energy market remains incomplete which prevents EU citizens and the EU economy from receiving the full benefits of energy liberalisation.”

The Commission will now seek endorsement of the energy and climate change proposals during the Spring European Council and develop legislation in light of these discussions. More details may be found at http://europa.eu/press_room/presspacks/energy/index_en.htm

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