The European Union has the great opportunity to become an Energy Union and improve its energy security and competitiveness. This is a good opportunity for the southern and eastern bloc of the Union to get ingrated of the energy transition network.
EU must improve integration of its energy markets if it is to achieve its 2030 renewable energy targets, according to the International Energy Agency (IEA). In a review of EU energy policy, »Energy Policies of IEA Countries: European Union – 2014,« the IEA praises the EU for making progress in liberalizing energy markets and for its global leadership on climate change. However, the report makes a number of policy recommendations aimed at helping the EU eliminate barriers and better manage the costs of its shift to clean energy. In October, the European Council agreed to binding 27% renewable energy targets and an at least 40% reduction in greenhouse gas emissions by 2030 compared to 1990 levels. The targets are expected to lead to the rapid deployment of renewable energy capacity; however, the IEA has found a number of barriers that could slow deployment. The IEA notes that much of the integration of Europe’s energy market has been confined to northern and western parts of Europe and that until important interconnections are built across the entire bloc, the EU will not have a truly integrated, single energy network – the basis for a so-called Energy Union. Moreover, despite reforms at the wholesale level, markets are increasingly distorted by the persistence of regulated prices and rising green surcharges and levies. »To make the most of the diversity of its energy sources, and to move towards an Energy Union, the EU must better pool its resources within the internal energy market to enhance both energy security and the competitiveness of its industry,« said IEA Executive Director Maria van der Hoeven. The IEA report also recommends reforming the EU Emissions Trading System (ETS) and increasing investment in renewable energy. The report does advise, however, that the EU must further diversify gas and oil supplies and that it cannot afford to reduce its energy options: nuclear, coal and unconventional gas and oil will need to be part of the mix.