The European Energy Policy Framework and its Present and Future Impact on the Security of Energy Supply

Proceedings Publication Date:

05 Sep 2016
Dr. Ferdinand Pavel
Dr. Ferdinand Pavel
Part of the proceedings of
The overall objectives of the present EU Energy Policy Framework is to achieve three main goals: sustainability, competitiveness and security of supply. The approach to achieve these somewhat conflicting goals is the creation of common energy markets across all member states. The process started in the mid-1990s with vertical unbundling of integrated energy firms and the introduction of regulation, network access rules as well as targets for opening of electricity and gas markets. Since then, several EU directives have further accelerated this process, e.g. by requiring legal unbundling of network operations from generation, trading and retailing activities. Moreover, the introduction of a cap-and-trade system of Greenhouse Gas (GHG) emissions in 2005 marks an important step towards more sustainability. Recently, the increasing import dependency of oil and gas supplies and in particular the Russian-Ukrainian gas crises in 2006 and 2009 have shifted public attention towards the security of energy supply. Since then, policy makers have repeatedly demanded action such as import diversification and the formulation of a common foreign energy policy. However, it is still not clear to what extent these requests will be incorporated into the EU Energy Policy Framework.

However, import dependency and the corresponding threat of politically-motivated supply disruptions are only one of several threats to the reliability of energy systems. Other factors, such as accidents or unexpected whether changes also impose significant risks. Hence, policies to strengthen the security of energy supply need to address all relevant factors. Obviously, what is required is a flexible and competitive system were bottlenecks and unexpected interruptions can be bypassed and – if necessary – new supply routes be build. Thus, the present and future impact of the European Energy Policy Framework on the security of energy supply depends on the extent to which it enables flexible market reactions and to which it sets incentives for future investments.

Against this background, the presentation will discuss how EU energy policies influence the functioning of national gas markets and their integration towards a common market. Furthermore, the presentation will highlight the current and future need for gas transportation capacity and examine to which extend the EU energy policy framework is capable to support the necessary investment.