MADRID – At last month’s European Council meeting in Brussels, energy issues dominated the agenda – for the third time this year. Energy’s emergence as a focal point for European leaders makes sense, given that it lies at the confluence of the three existential threats facing the European Union: a revisionist Russia, the declining competitiveness of European businesses, and climate change. As these developments challenge Europe’s values, its social model’s viability, and the world’s long-term security, EU leaders must focus on building a new energy system that ensures a reliable supply, sensible pricing, and ecological sustainability.
The good news is that a framework is already emerging that could facilitate this initiative. Indeed, beyond widely discussed targets for energy production for 2030 – covering greenhouse-gas emissions, energy efficiency, and renewable resources – the European Council’s conclusions embrace key elements of a practical and effective approach to energy. But, in order to move from aspiration to implementation, Europeans must muster the unity of purpose that so far has been conspicuously absent in EU energy policy.
The most tangible element of the EU’s emerging energy-policy framework is the internal energy market, which, once completed, will allow for the unimpeded flow of energy and related investments throughout the EU. Such an integrated energy market would lead to significant savings – estimates go as high as €40 billion ($51 billion) annually by 2030 – thereby providing a much-needed competitiveness boost.
The internal energy market would enhance Europe’s energy security as well. Though the EU as a whole maintains a balanced energy mix, with supply divided relatively evenly among gas, coal, oil, renewables, and nuclear generation, individual countries are often excessively dependent on a single source and, more dangerously, a single supplier: Russia. Unrestricted energy flows within the EU would mitigate the risks of supply disruptions or shocks.