EU energy policy explained

Professor Dr Kyriakos Kouveliotis FRSA, Provost and Chief Academic Officer at the Business School and Innovation, discusses EU energy policy

The energy policy of Europe has reached a crucial turning point. Geopolitics, the need to address climate change, and the need to become economically competitive drive the development of this sector. Under the supervision of Dan Jørgensen, the European Union is changing its strategy in relation to energy and moving towards creating a united, flexible, and environmentally friendly system. Thus, the primary problem is not only to produce energy with zero emissions but also to build a coherent chain of operations from the generation to the consumption of renewable energy sources (RES).

Promoting renewable energy production

Dan Jørgensen’s strategy aims to promote renewable energy production. This objective implies overcoming administrative barriers, expanding the energy infrastructure, and harmonising national energy policies with the common European framework. In other words, Dan Jørgensen suggests solving the problem through structural changes rather than sporadic measures. Europe has already shown that RESs, mainly solar and wind power plants, can be produced very quickly. However, further growth is possible through digitised networks and forecasting technologies. Hence, expanding production is necessary, but it is also vital to ensure the system’s flexibility.

To achieve this aim, it is required to develop energy storage technology. In this case, the system would be able to store extra energy that was generated during high peaks and distribute it effectively. Consequently, such energy distribution would minimise expenses related to energy production. Moreover, this step would make renewable energy a reliable source since its volatility would become irrelevant. In this way, Dan Jørgensen emphasises the significance of developing both renewable energy and storage technology in the future.

Energy efficiency and the Energy Union

Energy efficiency should also be promoted to make the energy system more flexible. In general, this strategy implies creating an energy system that does not require ongoing investments. The European energy system will become more sophisticated, as the amount of energy consumed will depend not only on its availability but also on its price. Therefore, the energy policy will encourage people to save energy and consume fewer goods, thereby likely increasing the number of environmentally friendly products available on the market.

It is essential to stress that these strategies are unlikely to be effective without integration. The concept of Energy Union is still in its infancy, even though it has been considered for several decades. However, today the idea of the Energy Union receives a new impetus for implementation. The Connecting Europe Facility provides funding for projects related to energy infrastructure in the form of grants, which can significantly contribute to the creation of an energy union. The implementation of such an idea would also strengthen energy security.

In other words, there is an opportunity to strengthen energy security without resorting to importing energy resources. At present, European countries face difficulties obtaining energy because their energy systems are relatively small. Therefore, a powerful unified system that would provide energy to all member states would eliminate this issue. Moreover, such a system would include RESs, thereby reducing environmental risks and enhancing the reliability of the energy network.

The economic perspective of energy policy

From an economic perspective, the introduction of these innovations would increase competitiveness. The energy market would function more efficiently, thereby reducing companies’ production costs. For instance, a stable energy system would enable enterprises to invest in energy-intensive projects. Therefore, energy policy should promote not only environmental objectives but also economic goals. However, the process of introducing the new energy system can be hindered by various factors. For example, the energy market is still dominated by national interests, which can affect its functioning.

In summary, Europe’s energy policy has already moved in the right direction. Although many problems remain unresolved, Dan Jørgensen’s strategy is quite realistic. Nevertheless, its successful implementation depends on the political will of member states, as they can impede the process of building a united energy system for various reasons. Overall, the new energy strategy looks promising from both environmental and economic perspectives.