Correlation Table 2.0

MS nervous smile

Last month I posted a first version of a ‘correlation table’ aiming to show how the elements (or priorities) of a proposed “energy union” fit with basic EU treaty provisions and with other EU policies and laws.

See 15 Nov: Energy policy contains 4 objectives, not 3 or 5.

Since then, incorporating feedback from a variety of people – for which thanks! – I’ve made a new clarified and expanded version of the same table, available in three formats below.

My basic point is that the Union institutions can only act in so far as they are empowered by the EU treaties and therefore that proposed actions must fit with the treaties. Moreover, with “energy union”, we are not starting with a blank page; we must take account of what has already been done over past years, which is substantial.

Further feedback, discussion and sharing as ever welcome.

Corellation Table v2

Click on image to enlarge * PDF VERSIONGoogle Doc

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Germany, coal and climate pollution

German coalGerman draft plans to close coal-fired power plants will not lead to any extra cuts in greenhouse gas emissions in Europe. Why? Because Germany has no plans (so far) to reduce the number of ETS allowances that it auctions each year going forward.

In other words, the surplus pollution rights, no longer required by operators of the affected installations, can be bought and used by any of the other 12,000 installations elsewhere in the EU. Allowances bought in one year can also be saved for use in any subsequent year.

Firms operating coal-fired power plants in Poland e.g. will very pleased at the extra surplus allowances available to them, pushing down EU-wide carbon prices even further and thus prolonging by years the time by which they will have to burn less coal and diversify across other energy options.

There’s more

Other important questions remain to be answered in Berlin. Will owners of the closed installations be compensated for further income now forgone? According to press reports, some at least are seeking this. And if this happens, where will the money come from? ETS revenues perhaps? In any case, would such compensation from state resources be subject to state aid control and possible veto by the European Commission?

More interestingly, and perhaps as an alternative to direct compensation payments, if delivery of domestic plans requires German’s ‘Big Four’ companies to conclude with each other, and an effect of which would be to increase profits through higher wholesale domestic power prices, would this not also raise competition i.e. anti-trust concerns with the European Commission?

Lots of ground still to cover in these issues that I don’t think will be answered any time soon.

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Council conclusions to say nothing new

asleep (1)

On 9 December EU energy ministers will agree further conclusions on the internal energy market. Based on a collection of passive verbs, the final text was agreed in advance by deputy perm reps in Coreper-1 this week and so all that remain to be done is for ministers to show-up and slap each other on the back for the cameras.

Council conclusions are rarely translated, never indexed, never published in the Official Journal and as such are usually forgotten about within a few months if not sooner. But before this latest text is forgotten, it’s worth checking if it says anything new of note.

I’ve checked, and it doesn’t.

What’s next?

Energy policy contains 4 objectives, not 3 or 5

EU project team mtg 1 nov14

European Union energy policy contains four objectives, not three or five. But sit through any high-level speech these days – such as those by Šefčovič and Arias Cañete due Monday (event link) – and more likely than not you will hear the opposite claimed.

In the new mandate, an “energy union” of five “pillars” could soon replace the former “energy triangle” of three “corners” (though the later idea is unlikely to die easily). Such a move is only a recipe for more chaos, confusion and delay.

If not fixed, it will only slow our recovery from the neglect and incompetence of the Barroso-Oettinger years. The resolution of real-world situations such as pollution into the sky and billions cash exiting our borders to buy ever more fuel will only stall.

EU energy policy in fact contains four objectives, laid out in the Treaty as follows:

Article 194
1. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:

  (a) ensure the functioning of the energy market; 
  (b) ensure security of energy supply in the Union; 
  (c) promote energy efficiency and energy saving and the
development of new and renewable forms of energy; and

  (d) promote the interconnection of energy networks.
(EurLex source)

To get things done, we must avoid what is fashionable, vague or convenient for what is specific and known. To get things done, we also need to have a basic text common to all Union institutions rather than many different ad hoc texts in each. The treaties and existing legislation (the acquis) provide this. Courts cannot settle disputes on the basis on speeches or political declarations. Our Union is a union built on the rule of law already. Another new gimmicky union risks only to distract from the original authentic one.

So to help untangle the plate of cold spaghetti in front of us, I’ve quickly made the table below. It aims to summarise the different strands of the present debate, anchored in our treaty framework. I’m sure it could be improved and certainly it can be argued over. But it done quickly to share ahead of the Monday “energy union” launch conference (and thus this post at 11am Saturday).

Please let me know what you think, e.g. what if any changes would you make?

EU energy objectives

 Click to enlarge. Also >> A4 PDF version.

Jean-Claude’s Method

Day 2

Here’s the leaked memorandum on the working methods of the new Commission, circulated by Jean-Claude Juncker to other Commissioners on Wednesday.

At 38 pages, including five annexes, there no doubt plenty here for policy people across Brussels and beyond to get their teeth into.

In the introduction, the President’s “guidelines” (word taken from treaties) are referred to as “rules”, which is a rather interesting slight of hand by the SG.

Moreover, such a memo requires no change to or re-examination of the EC’s formal procedural rules (EurLex) and so the College’s choice of secret voting and secret minutes continues. (See my 9 September blog.)

Probably more to come back to and discuss when I’ve read the doc fully.

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