Select Committee on European Union Fortieth Report


ENERGY COUNCIL

Letter from Malcolm Wicks MP, Minister for Energy, Department of Trade and Industry to the Chairman

  I am pleased to enclose a copy of my written Statement to Parliament outlining the agenda items for the forthcoming Energy Council on 14 March in Brussels.

8 March 2006

Annex A

WRITTEN STATEMENT

  I will be representing the UK at the Energy Council in Brussels in the morning of 14 March 2006.

  This Austrian Presidency has organised this extra Council, in addition to the normal Energy Council scheduled to take place in Luxembourg on 8 or 9 June, to enable Energy Ministers to discuss progress on developing an EU energy policy. The need for a new European Energy policy was one of the key agreed outcomes from discussion between EU heads of government at Hampton Court last October during the UK's Presidency of the EU.

  Accordingly, the main substantive item on the agenda will be discussion of the Commission's Green Paper, "A European Strategy for Sustainable, Competitive and Secure Energy", published on 8 March. I attach a copy of this and will provide an Explanatory Memorandum in due course. The Green Paper outlines priorities and a broad range of possible actions, which together could provide a solution to the challenges facing the Community's energy policy, in particular the need to secure the energy supply and the competitiveness of European industry. Following a presentation by the Commission, Ministers will have a policy debate on the key issues. The Presidency has prepared questions to guide the debate. In particular, these will give Ministers the opportunity to comment on the Commission's analysis, to suggest other dimensions of energy policy that might not have been addressed by the Commission, and to highlight their main energy policy concerns and preferred solutions. This item will take up the bulk of the Council's time.

  Under Any Other Business, the Austrian Presidency will provide information on the Agriculture Council's ongoing work on bioenergy.

Letter from Malcolm Wicks MP to the Chairman

  I am pleased to enclose a copy of my written Statement to Parliament outlining the discussion at the recent EU Energy Council in Brussels on 14 March.

15 March 2006

Annex A

WRITTEN STATEMENT

  I represented the UK at the Extraordinary meeting of the Energy Council in Brussels on 14 March. Discussion focused largely on the recent Commission Green Paper on a European Strategy for Sustainable, Competitive and Secure Energy.

  Commissioner Piebalgs described the Green Paper as a comprehensive and balanced response to the Hampton Court agenda. The Commission envisaged a six month consultation period before taking a view on any additional measures, although some actions could be taken more quickly.

  For the UK, I recognised the scale of the challenge and need for prompt action. I emphasised the priority of completing the internal energy market, promoting both transparency and regulatory consistency, and supporting the DG Competition sectoral inquiry. Externally, I underlined the need for a coherent strategy to engage key providers, transit countries and consumers, but particularly Russia and neighbouring countries. I also advocated an ambitious but realistic approach to promoting energy efficiency and renewable energy sources. I drew attention to the UK paper identifying priority actions that the Spring European Council might endorse.

  Other Member States indicated broad support for the Commission's analysis, agenda and level of ambition. They welcomed the focus on open and competitive markets, though one warned against further legislation now, while another questioned how competitive markets could be consistent with ensuring energy security. Other issues to attract comment were support for energy efficiency, a long-term renewables strategy, developing interconnections, and new external initiatives with Russia and Euromed countries. Many Member States emphasised national sovereignty over energy mix. One explicitly supported the UK paper while others touched on many of the actions proposed there.

  Commissioner Kroes warned that the Commission would act against mergers or acquisitions that were anti-competitive, but noted that cross-border activity in this area was often a positive sign of the operation of an open and competitive market.

  The Presidency concluded that the Energy Council would return to the Green Paper in June.

  The Council adopted conclusions on energy Ministers' contribution to the 2006 Spring European Council. Council also approved the final text of the Energy Efficiency Directive.

  In two other brief items, the Energy Council is expected to adopt its own conclusions in June on the Agriculture Council conclusions on the Biomass Action Plan; and Poland made a presentation of its idea for an energy security treaty outside the EU framework.

Letter from Malcolm Wicks MP to the Chairman

I am pleased to enclose a copy of my written Statement to Parliament outlining the agenda items for the forthcoming Energy Council on 8 June in Luxembourg.

6 June 2006

Annex A

WRITTEN STATEMENT

  There is an Energy Council in Luxembourg in the morning of 8 June, at which the UK will be represented.

  Informal discussion at the pre-Council dinner on 7 June will cover the European Commission's Green Paper, "A European Strategy for Sustainable, Competitive and Secure Energy", published on 8 March. The need for a new European Energy policy was one of the main agreed outcomes from discussion between EU Heads of Government at Hampton Court last October during the UK's Presidency of the EU. Before the Council, the UK intends to submit its initial written response to the Green Paper. The UK's final response to the Green Paper will await the conclusions of the UK's domestic Energy Review.

  The main substantive item on the main Council agenda will be the Internal Energy (electricity and gas) Market, on which Ministers will have a policy debate. The Presidency has prepared questions to guide the debate and Ministers will be asked to agree Council conclusions on progress on the single market's implementation. The proper functioning of the single market in electricity and gas is a high priority for the UK. This item is expected to take up the bulk of the Council's time.

  Under the agenda item of sustainable energy production and consumption, Ministers will be asked to agree Council conclusions on the Commission's Biomass Action Plan. Under the same heading, the Commission will provide information to the Council on two Energy Efficiency initiatives: the consultation process on the Commission's Energy Efficiency Green Paper and negotiations for an agreement between the US and European Community on the coordination of energy: efficient labelling programmes for office equipment (Energy Star II).

  The Presidency or Commission will also provide information on International Relations in the field of Energy, encompassing the conclusion of the Energy Community Treaty and the EU's relations with OPEC and with Russia.

Letter from Malcolm Wicks MP to the Chairman

  I am pleased to enclose a dopy of my written Statement to Parliament outlining the discussion at the recent EU Energy Council in Brussels on 8 June.

14 June 2006

Annex A

WRITTEN STATEMENT

  Anne Lambert, Deputy Permanent Representative, UKREP, represented the UK at the Energy Council in Luxembourg on 8 June. Discussion focused on the EU's international relations, the Internal Energy Market and sustainable energy.

  On international relations, Commissioner Piebalgs summarised the EU's external energy priorities as a comprehensive energy agreement with Russia and coherent, systematic dialogues with key supplier, transit and consumer countries. He said that multilateral action would be most effective, citing the need for working together within the International Energy Agency and on an international agreement on energy efficiency. He provided updates on the Energy Community Treaty for South East Europe, on the EU-OPEC dialogue and on EU relations with Russia. On Russia, he said that the EU should develop a partnership of mutual self-interest covering investment, diversification, a reliability of supply and demand, third party access and non-discrimination; and that the Commission were considering a comprehensive energy agreement as part of the post-PCA relationship.

  In welcoming the Commission's work, some Member States emphasised that energy remained a national competence and that Energy Ministers should be informed and involved in agreeing Commission activity in advance. One Member State emphasised that progress with Russia depended on establishing a relationship based on trust. Another Member State stated that the relationship must be reciprocal and based on the Energy Charter Treaty principles, ensuring that EU companies can operate freely in Russia.

  The Council adopted conclusions on the Internal Market. The Internal Market had been on the agenda at the informal dinner on the eve of the Council, during which Commissioner Piebalgs detailed the next steps on the Green Paper:

    —  a hearing on 21 September prior to consultation closing on 24 September;

    —  a meeting of Member States' Energy Directors General in September;

    —  a document summarising the consultation to be issued in October for discussion at the November Energy Council; and

    —  on 13 December, consideration by the Commission of the Strategic Energy Review, the DG TREN Internal Market report and the final results of the DG COMP enquiry.

  Other documents to issue between now and then would be the Energy Efficient Action Plan, communications on clean coal and nuclear, and the Renewables Action Plan.

  Discussion of the Internal Market during the formal Council focused on the role of regional markets, on steps needed to complete the market and on diversification. The Commission supported regional initiatives, while warning that these should not undermine the overall objective of a single energy market. The Commission said that it would continue to monitor and assess progress, reporting at the end of the year. Co-ordinated diversification of supply sources, relevant infrastructure and new technologies were also crucial. The Strategic Energy Review would bring all this together.

  All Ministers supported, regional markets as a building block to developing a single market. Two Ministers said that existing regional markets could be extended to other Member States and explicitly invited the UK to join the North West market, which now involves Germany, France, Netherlands, Belgium and Luxembourg. Many Ministers emphasised the need to harmonise regional markets to ensure the development of the main objective of a fully functioning internal market.

  The UK advocated political engagement in the development of regional markets and in effective unbundling and market transparency. Several Member States supported the UK, though one viewed further unbundling requirements as unnecessary.

  On diversification, many Member States identified increased interconnection, development of renewables and energy efficiency technologies as the key drivers. Some Member States pressed for the development of indigenous sources of supply, including nuclear power. Others wanted a common approach to diversification, but some noted that responses related to Member States' individual circumstances.

  One Member State questioned the effectiveness of the EU Emissions Trading Scheme Carbon pricing policy, noting its significant impact on electricity prices. The Commission thought that the ETS fundamentally worked, though it needed refining before the next stage. Another Member State thought security of supply more important than liberalisation, while another noted that it was developing security of supply indicators with the UK and Commission.

  On Sustainable Energy, the Council adopted conclusions on a Biomass Action Plan. The Commission said that, in implementing this, priority would be given to a proposal on renewable heating and cooling and to the strengthening of the Biofuels Directive. The Energy Efficiency Action Plan would emphasise implementation and enforcement of existing legislation, measures to address energy consumption and financial incentives. The Energy star negotiation with the US had concluded with agreement on significant improvements in standards and coverage. The Commission hoped other key consumer countries would join. Some Member States emphasised the importance of updating labelling legislation.

  In conclusion, Finland, the incoming Presidency, identified its energy priorities as:

    —  developing European energy policy, particularly renewables and energy efficiency—the Internal Market; and

    —  Russia.

  The next Energy Council is scheduled for 23 November 2006.



 
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