Energy Security and European Union Energy Market

Energy Security and European Union Energy Market

DOI: 10.4018/978-1-5225-3625-3.ch009

Abstract

The evolution of the EU is aimed at eliminating development gaps between states and creating single markets for goods in the EU. More, the creation of a single energy market will lead to profound changes both at the level of EU and national energy regulatory instruments, major infrastructure changes, and the creation of an integrated management system at European energy corridors. These involve massive investments in the field of research and implementation of performing technologies, where information systems and process digitization play a decisive role. The main objective of this chapter is to understand the necessity and purpose of creating a single energy market in the EU and to guarantee energy security through the development of non-polluting and high-efficiency alternative technologies at EU level, but also in partnership with the states in the area with huge resources.
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European Union Energy Market

The EU takes into account a single energy market, less polluting, used in conditions of high efficiency by the industrial and domestic consumers, with a rising percentage of renewable sources. In this subchapter are presented the necessity, the purpose and the measures taken at EU level to create a unique energy market.

The EU cooperation policy regarding energy has the following priorities:

  • The lack of access to energy

  • The increase of energy production from renewable sources

  • The diminishing of the climate change effects.

By accomplishing the strategic objective, the EU wants a free and easy access to energy for all member states and their citizens. The major investments from the public and private sectors aim to increase the energetic efficiency but also the growth in the production of energy from renewable sources. These measures are undertaken in the efforts of protecting the environment, reducing the emission of greenhouse effect gas (carbon dioxide) and limiting its influence over climate change and extreme meteorological phenomena.

The purposes of these measures are: opening international markets for cross border transactions, stimulation of the spirit of competition, giving multiple alternatives of suppliers to the consumers. Thus, the market kept receiving suppliers, including small and medium companies, even in areas with fluctuating production, depending on the climate conditions (solar and wind energy).

In the field of renewable energy one must take into consideration that at first investments are high, the amortization will be slow, but the maintenance and operating costs are low. Thus, the incentives offered by each state, while further developing new products and new technology will reduce investment risks and promote the use of renewable resources in generating energy at competitive prices in a free market.

The EU has achieved its objective of introducing the renewable sources energy into the market which, based on data from 2014, shows that the renewable sources energy share reached 16% of the gross final energy consumption of EU.

The targets for greenhouse gas emissions have been achieved. In 2015, the emissions of greenhouse gas were reduced by 22% below the 1990 levels.

We note that EU economic growth increased simultaneously with the reduction of greenhouse gas emissions. Between 1990-2015, gross domestic product (GDP) of the EU combined increased by 50%, while total emissions have decreased by 22%, countering the fears of the specialists that restructuring the energy infrastructure and its implications at industrial and technological level will damage the economic growth.

Investment in renewable energy sources in the EU from 2004 – 2015 is shown in Figure 1.

Figure 1.

New investment in clean energy in Europe ($bn)

Source: Bloomberg New Energy Finance.

As you can see from the graph, renewable energy investments in the EU were upward until 2011, then declining starting in 2012. This shows that EU Member States have taken measures to develop such investments, including economic policy measures by providing green certificates for green energy delivery to the grid. Subsequently, with the green energy quotas set by EU policy for each country (according Table 38. National overall targets for the share of energy from renewable sources in gross final consumption of energy in 2020) this financial support has significantly reduced, given the process of integrating renewable energy to compete on a free energy market.

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