Energy PolicyThe European Dimension

ESRC Energy Research Conference

Policy Studies Institute. London, March 31, 2003.

Prof. Aviel Verbruggen

University of Antwerp (UA-STEM)

Contents

1. The ‘European Dimension’2. Sustainable Development &

Markets3. Energy Security and Policy Focus4. Changing Research Agenda5. Policy Making Capabilities

EU Policy Making

Council of Ministers

EU Parliament

EUCommission

Market CredoInd. lobbyists

Societal lobbyism

Nationalinterests

Directives: implementation by Member States

EU Energy Policy Making

InternalMarket &

Competition

EU Energy Policy

SustainableDevelopment

Accomodate different (opposite)

interests

Definition of Sustainable Development

Meet the needs of the present + allow future generations to meet own needs

•Welfare growth for the poor•Redistribution of natural resources in a fair way

•Populations•Accumulation of wealth

•Use of natural resources•Destination of investments•Technological development•Institutions

Goal

Change

Growth Control

Redistribution

Sust.Dev. : 4 Dimensions

Environ-ment

Social

(Democracy)

Economics

Sustainable Development Challenges answered by Energy Policy

Sustainable Devel.

Redistribution

Resource use

Investments

Technology

Institutions

Energy Policy Answers

Wealth growth first + aid programmes

Promote Energy EfficiencyEnergy Taxes (?)

Subsidies for Renewables,CHP, etc.

R&D Renewables, Efficienttechniques

Markets bring salvation

Competition and regulation

UnbundleFunctions

Trans-parancy

Regulationby Function

Harmon-ising

Competition

Energy Security=

Energy SUPPLY security

Shift from Central fossil-nuclear Supply to• renewable solutions• distributed resources• energy demand reduction

is taking off slowly

“Energy Security = Guaranteed Services”

When?

Fossil-nuclear Demand Reduction

Energy use = {number of people}. {GDP/capita}.{energy/GDP}

Demand Reduction = [growth control]. [conservation].[energy efficiency]

Conservation is positive (less traffic jams, stress, obesity, ...) or negative (curtailed aspirations, redistribution discussions, ...)

Efficiency is always positive!

0,00

0,02

0,04

0,06

0,08

0,10

0,12

0,14

0,16

0,18

0,0 0,2 0,4 0,6 0,8 1,0 1,2

Electricity intensity (kWh per $US GDP)

Ele

ctri

city

pri

ce (

wei

gh

ted

ave

rag

e in

du

stri

al a

nd

do

mes

tic)

$/k

Wh

Denmark

Czech RepublicPoland

United States

Belgium

Switzerland

Japan

Slovakia

OECD (1998) Demand Curve for Electricity Efficiency

Conclusions for Energy Policy

• Energy Efficiency requires Long-term TAX POLICY

• Energy BILLS remain about constant in any tax regime

• Conservation must take over when Efficiency hits the ceiling

• Growth control must follow

Technology & Politics

TechnicalFixes

HumanDimension

Politics

Efficiency

Conservation

Growth control

Conclusions Energy Research

• Energy too much the business of engineers and business economists

• The ‘human and social’ dimensions are more and more important, e.g.:*social and democratic sustainability*blueprints and back-casting*limits on wealth hoarding*preserving cultural diversity, etc…

Energy Public Policy Capabilities

• Regulatory Capabilities

• Public Energy Agencies

• Independent Expertise

• Public Dialogue … uneven and … far too weak in most EU nations