Ministers switch on to energy supply

By Emily Smith

Date: 01/12/05

Energy issues were high on the agenda for both industry and politicians this week, in the run up to a meeting of EU energy ministers on 1 December.

Critical questions from climate change to international energy relations will be on the council timetable, although no decisions are expected from ministers on Thursday.

The energy council will be the last before international governments meet in Montreal to discuss future climate change policy. The British presidency has therefore asked ministers in Brussels to say how they think the energy agenda should work with the fight against climate change and what role technology and alternative energy should play.

Ministers will also be asked to update the European Commission on their experience with and priorities for energy efficiency, ahead of an action plan due from the EU executive next year.

This Energy Council is also the first since UK Prime Minister Tony Blair told MEPs in October that the EU should work towards a common energy policy, apparently reversing previous British opposition to a Europe-wide agreement.

Discussion of his comments is not explicitly on the agenda, but ministers look likely to raise the question during the debate on better regulation and the internal gas and electricity market, or during the British European presidency briefing on EU-international energy relations.

The energy company British petroleum (BP) on Monday (28 November) announced plans to channel _8 billion into 'green' energy sources over the next decade.

The money will be split between solar, wind, hydrogen and combined cycle gas turbine (CCGT) power generation. CCGT combines gas and steam power production in one plant and is more efficient that traditional generation.

Speaking to European Voice, BP executive chairman Iain Conn said the 'alternative energy' plan was "an important step" towards seeing a five- to tenfold increase in the BP renewables sector over the next ten years.

The biggest challenge for the EU, said Conn, would be developing regulation that deals with all energy concerns, from climate change to security of supply, and does not favour one energy source over the others.

"Governments should not be backing winners," he explained, "the world needs choice. Customers want choice and it leads to economic growth. Nations need choice to ensure security of supply. And the planet needs choice to combat climate change."

Also on Monday, UK industry regulator Ofgem called for an investigation into possible market distortion to see why, at a time of high prices, the rest of Europe is not selling more gas to Britain.

Duncan Sedgwick, of UK industry group, the Energy retail association, said market problems were deep rooted. Sedgwick said that Europe should consider the lessons to learn from the British energy market model, if it was serious about having a level playing field for 25 member states.

"The UK is not a perfect model, but since privatisation and deregulation [in the late-20th century] it has become very customer-focused, very price-focused and pretty transparent."

This made it relatively easy, he said, for big European energy players to buy into Britain, but "where is it possible for the UK to do the same back?"

He said: "How can we have market transparency in some countries and not others? More transparency doesn't mean prices will automatically come down, but at least you can see what's going on."

Preview of the EU's Energy Council on 1 December 2005. Among the issues on the agenda were climate change, energy efficiency and international energy relations.