EnergyWatch

EU energy ministers to battle over future energy policy

The energy ministers of the EU will meet for a marathon meeting Monday, at which one of the cornerstones of the EU inner energy market is up for debate. Germany will push for free-flowing electricity in Europe, while the bloc could ultimately end up failing to reach agreement on the issue.

BRUSSELS

When a translator is ordered to come to a meeting of the EU ministers in Brussels, it is a sign that a real battle awaits.

That is the case today as EU energy ministers gather for what looks set to be a marathon meeting.

The ministers will decide on four important points from the winter package put forth by the EU Commission in November last year – the electricity scheme, the electricity directive, the renewables directive and the Governance regulation.

In particular, the discussion around the electricity scheme and electricity directive, key aspects of the EU's inner energy market, are expected to spark heated discussions. As such, it has been decided that negotiations on these two points would begin in the morning, before letting things calm down, while negotiating the renewables directive and governance law, before returning to the tough issues in the evening.

Germany blocking

The major point is whether – and if so, to what extent – member states should be able to halt imports of electricity from other countries.

The principle, which is fundamental for the entire EU inner market for energy, is that the transmissions operators should not be able to limit access to inter-connectors in order to resolve internal bottlenecks.

The EU Commission has proposed preserving this principle, but has proposed that only a specific percentage of capacity needs to be available to meet this requirement.

The main issue, then, is the size of this percentage and how soon the change should come into effect.

Previous drafts have suggested 70 or 75 percent, while the latest draft states "X" percent.

Estonia, which currently holds the presidency of the Council of the European Union and is thus overseeing the negotiations, will not put down a high figure in contrast to the wishes of countries such as Denmark, and is allowing those against the proposal (Germany, followed by France) to argue why the percentage should be smaller.

"Germany is blocking a bigger change. It is deeply regrettable that we have a country in central Europe, which many countries border and which is thus critical for the function of the inner energy market, which is so difficult and sluggish in this area," says Anders Stouge, vice president of Dansk Energi, referring to the fact that in 2015, Germany only allowed the use of 13 percent of the cable between Denmark and Germany and thus effectively hindered Denmark from selling its wind energy to Germany.

"A stopper in the inner market," says Stouge.

Germany is a core player when it comes to getting the inner energy market up and running, because it is the country in Europe with the most neighbors and borders.

A phone call from the upper echelons

The issue is so important for Germany that it was rumored in Brussels that German chancellor Angela Merkel's office allegedly called the EU Commission president Jean-Claude Juncker's German cabinet chief to push for the Commission's general directorate for energy to support Germany in the case.

It is unheard of that the highest level of national government becomes involved in this kind of issue, but there are indications that the German pressure – wherever it has been applied – could be working, as the percentage has now been written as an "X" percent.

This invites criticism from Stouge, who makes no secret of his disappointment with the German position and does not believe that a true inner energy market can be achieved unless power can flow freely.

"This is a cornerstone of making the Energy union a reality. If we are to achieve a situation where we actually have an internal market, it highly depends on a physical connection, and there is a gap in the connections that we have. And Europe cannot benefit from the fact that more and more renewables are being produced if the conditions inhibit it from being transported to where it is needed," says Stouge, adding that Germany is therefore also really hindering the entire climate movement ahead of 2030 and 2050."

"The entire idea is that green energy will completely take over, which is also what European electricity producers have decided via Eurelectric: that we will be CO2 neutral "well ahead" of 2050. But that cannot be fully realized if there is no inner market with a proper connection that is fully utilized."

Protectionism and special interests

There is also disappointment within the EU Parliament regarding Germany. Morten Helveg Petersen, from liberal ALDE group, is the spokesperson for the ACER directive, which deals with how many muscles the European Agency for Energy Supervision must have.

However, negotiation of the directive has been delayed in Parliament because it is first necessary to learn the position of member states in relation to market mechanisms.

"The problem is that there are huge international interests at stake. Everything within this industry has such huge sums behind it, that it's crazy. It is correct and true when the EU's state and government leaders say that of course there can be an inner energy market. Of course electricity should flow freely. But then when you get down in the details, there are suddenly 127 technical explanations for why it is not possible in a given country. The devil is in the details when it comes to this, but behind it there are also classic issues such as protectionism and special interests," says Helveg Pedersen.

Lacking a German government

There are therefore also doubts about whether the energy ministers will be able to agree on a negotiation mandate for the electricity scheme.

Not least because, as is well known, the German government has not been formed yet. There are differing opinions as to whether this is actually an advantage or a disadvantage in terms of the negotiations.

Some argue that it is a disadvantage, because the negotiations on the German side are thus coming from an official level, without a strong minister to take responsibility and live up to European responsibilities.

Others argue that it could be an advantage, as a new German minister does not need to flex her or his power at an international level.

Another factor which reveals how difficult today's negotiations will be is that the EU's state and government leaders already decided in 2011 that the EU's inner market for energy would be clarified in 2014 at the latest.

Therefore, there is also pressure on the Estonian EU presidency to land a deal.

The afternoon, the evening and perhaps the entire night will prove whether they manage to succeed.

English Edit: Lena Rutkowski

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