The EU Energy Package – A closer look

When the first dust has settled from the comments to the Energy package and every party has confirmed their (mostly known) positions it might be time to see what the package really contains.

Firstly it is truly a laudable attempt to bring together a package that tackles issues such as energy sources, energy efficiency, energy technology, security, market performance and many more of the crucial questions, and also to mix it with global politics. There is no way to make such a blend and assume that everyone should be fully pleased. Still the package has such a form that subsidiarity allows for every country to make their best choices while pulling the common European wagon forward.

That said, it is obvious that the first victim in the compilation of the document has been the comprehensiveness. It is a document in pieces loosely glued together, as will be shown below. The second victim is very unfortunately the concept of sustainability.

Starting on the wrong foot?

The metaphors people use should not be underestimated. They reveal the mind-set of the speaker. In this case the document starts in the worst possible way by recalling the Messina declaration from 1955 that says that “…ministers have agreed to put more abundant energy at a cheaper price to the European economies". The idea is probably to recall that ministers acted jointly (which is a good idea) but as the reading continues it becomes more and more obvious that the authors are still caught in the thinking that energy should be abundant and (maybe even) cheap. If they at least had made a correction to talk about energy services. Now it is like seeing a triple-jump athlete starting on the wrong foot!

It becomes obvious when they arrive to the energy technology plan (chapter 3.6). In 2050 the system switch should be completed and supply us with low-carbon energy from large shares of renewable energy, but also sustainable coal and gas, sustainable hydrogen, generation IV nuclear fission and also fusion power. Should we again be swimming in an abundant sea of energy? And it is hard to see in what sense nuclear is sustainable (except for the waste!) or for that matter hydrogen, which requires more primary-energy than if the electricity is used directly.

Acting and learning together

The document should supposedly guide policy-design in which the common efforts in R&D are very important. Or in other words the market learning and the technology development that often is named and framed in the “learning curves”. There is an extensive data-material appended to the package but it seems to stem from other sources than the EU primarily (like the IEA) and is presented in a deterministic way. The IEA material from ETP is however produced in a scenario-format (i.e. snapshots) with different development and learning tracks so the “learning effects” might be hidden. These effects are also the main thrust in the Stern-Review and its calculation for how the world can get away with less cost in avoiding the total breakdown. But where is CHP, where is distributed generation, where is the possible impact of a large scale co-operation between the EU and growing markets in developing countries over e.g. PV-applications? This EU-package should at least give the basis for a discussion on how the real sustainability can be achieved if spurred further based on fruitful co-operation between countries and actors and not the least do so in fostering of smaller-scale technologies.

R&D and dissemination to markets are crucial elements in policy setting. Some of the early comments from the Renewable Industry proponents points at how the selection, the level and the distribution of targets for their different fuels is important and in worst case could stop a promising development even if that is not the intention. The policy instruments to move on have been thoroughly investigated in other EU-projects.

Central planning in market clothing

Financial Times says that in spite of all the huffing and puffing in Brussels the big actors on the energy markets will not be moved by the demand to separate generation and distribution. And why should they. Indeed there is a case for such separation to prevent that all (even small and independent) producers are blocked away and instead could enter the market. But the real issue is that there is still not much that encourages such or for that matter encourages Flexible Demand (Demand Response) which could be the customers way to signal when enough is enough in the pricing.

The document is rather focused on a textbook case of competition, on large scale generation and on huge transmission that has over and over again proved to be vulnerable. It is rather an idea of central planning disguised to market where in any case the huge actors have an advantage over the small. In subsidised fuel, access to capital on favourable terms etc. etc.

Energy Efficiency is a part of the system

It is certainly good that an initiative of this sort for the first time really recognises the potential of energy efficiency and promises to work for improvements. But it seems as if it will happen in a separate box. If one really wants to establish sustainability energy efficiency and fuels supply has to seen in a context. They determine each other! If you chose a system with high energy intensity, kWh per service-unit, you lock yourself into use of fuel with high density, kWh per volume or surface (like fossil and nuclear). If we want to have more renewable energy we have to recognise that it mostly has a lower density and stands it best chances if used together with low-intensity use. And we all know that there is a lot (and will be more) of such technologies that provide the same or more service with less energy. Able to “Do more with Less”.

Or is that the problem, not all of us know that? Yet!