Eon chief promotes EU-wide energy policy

German energy provider's CEO says more lateral thinking would benefit all
By Sarah Arnott
Monday, 29 June 2009

The German energy company Eon is calling for a common European energy policy to ensure secure, climate-friendly and economically viable power supplies.
The energy sector is in challenging times. It is simultaneously required to meet carbon reduction targets while funding expensive, often untried, infrastructure such as offshore wind farms, and meeting ever-growing demands for power without an over-reliance on foreign gas.
The mish-mash of subsidies, regulations and targets across Europe is a major barrier to progress, says Wulf Bernotat, Eon's chief executive.
"We need not have 27 separate systems," he said. "We are a union and we need an EU system that functions at an EU level." Part of the problem is to make renewables economically viable. In Europe alone, the target for 900 gigawatts (GW) of wind power by 2020 will require 300,000 new turbines and more than €1trillion (£852bn) of investment. Structural changes are also needed, in transmission grids and storage capacity, and also in political and financial structures such as the emissions trading system. The development of carbon capture and storage technology faces similar issues, requiring a region-wide policy; as do decisions on which mix of sources – renewable, gas, coal or nuclear – will best ensure a secure and affordable supply. Politically, the prognosis for a common energy policy is not good. The attempt to give the European Commission the necessary power structure was felled with the rejection of the Lisbon Treaty.
"A number of senior politicians realise it would be an advantage, especially for security of supply," Dr Bernotat said. "But a number of countries, including the UK, are not keen to give up authority."
But all is not lost. Interconnecting infrastructure is creating a common market where power is traded across national boundaries, bringing wholesale prices broadly into line in Germany, France, Benelux and Switzerland. These market forces may be strong enough to force politicians' hands. "A common energy policy might happen anyway, formed by market forces that will effectively engineer the political reality," Dr Bernotat said.
In the meantime, international progress on climate change is likely to be slow. Even with the new US administration, expectations of progress at the United Nations climate change summit in Copenhagen in December remain muted.
"The best realistic expectation for Copenhagen is that the US starts to define targets for [its] carbon emission reductions. But I expect it to be modest," Dr Bernotat added.