#1 Energy at the core

Ideas for coffee-break conversations

Energy and industry are foundational to societies. The very European Union (European Community by then) was created in 1951 from an energy and industry treaty that gave birth to a European Coal and Steel Community (ECSC / CECA) based on a common market, common objectives, and common institutions -as per its Article 1. In its Article 3, it stated that in the common interest, the institutions of the Community shall: (a) [… ] see that the common market is regularly supplied, taking account of the needs of third countries; (b) […] assure equal access to the sources of production; (c) […] seek the establishment of the lowest prices which are possible […]; (d) […] encourage enterprises to expand and improve their ability to produce and to promote a policy of rational development of natural resources, avoiding inconsiderate exhaustion of such resources (e) […] improvement of the living and working conditions of the labor force […]; (f) further the development of international trade […]; (g) promote the regular expansion and the modernization of production […].

The ECSC Treaty, a subset of the Schuman Plan, advanced French and German reconciliation by means of integrating their coal and steel industries and laying the institutional foundation of what would become the European Community and later, European Union. The Treaty was set to expire in 2002. For the last 70+ years, energy security, affordability, competitiveness and sustainability, have been at the core of EU’s vision. These would be immutable pillars of the European energy strategy, or so should they have been.

Fast forward to the year 2000, the European Commission (EC) published a “Green Paper: Towards European strategy for the security of energy supply”. Its executive summary stated that The European Union's long-term strategy for energy supply security must be geared to ensuring, for the well-being of its citizens and the proper functioning of the economy, the uninterrupted physical availability of energy products on the market, at a price which is affordable for all consumers (private and industrial), while respecting environmental concerns and looking towards sustainable development, as enshrined in Articles 2 and 6 of the Treaty on European Union. The EC clearly stated: external dependence for energy is constantly increasing, and Europe needed to land a long-term strategy aimed at security of supply, availability, competitiveness, sustainability. 50 years after the ECSC Treaty was signed, the Green Paper provided the bare bones of that long-term strategy and called for a debate on the energy choices to be made.

In 2007, the 27 heads of State signed the Treaty on the Functioning of the European Union (also known as the Treaty of Lisbon). The EU members agreed to move forward in their energy policy integration. Article 194 of the Treaty states that Union policy on energy shall aim […] 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. Member States maintained the authority on energy resources exploitation, energy mix and sources of energy supply but the Treaty served as a legal foundation to launch major common European regulatory packages that would shape the EU energy strategy: Fit for 55, RED I, RED II, RED III…. Again, energy was at the core of the EU integration.

In 2010, the EC published a Communication to the European Parliament called Energy 2020. A strategy for competitive, sustainable and secure energy. Again, security, sustainability and competitiveness were the top priorities. 10 years after the Green Paper and 3 years after the signature of the Lisbon Treaty, the EC kept insisting on the same priorities but this time the tone was different, its Executive Summary started with the following words: The price of failure is too high. Energy is the life blood of our society. The well-being of our people, industry and economy depends on safe, secure, sustainable and affordable energy. The EC was expressing a sense of urgency not seen before. The gas disputes between Russia and Ukraine were affecting EU supply, with supply shutdowns and spike in natural gas prices. Despite several warnings issued by the EC, Europe vulnerabilities were exposed for the world to see.

Renewable energy was, and still is nowadays, a strategic priority not only for the sake of sustainability but for self-sufficiency and competitiveness. However, in the years following the European Commission’s urgent call for an energy transition, the discourse shifted toward a “green transition,” in which reducing greenhouse gas (GHG) emissions became virtually the sole strategic priority.

Coffee-break conversations

Many European countries created critical vulnerabilities by limiting their energy supply sources to a very small number of suppliers or technologies (natural gas pipelines, nuclear power, coal, etc.). When did our leaders decide to outsource a fundamental aspect of our societies to other (and few) countries? If we have been clear about the pillars of a sound energy strategy for more than 70 years, how is it possible that we lost sight of what was important? Could it be that decades of peace and stability led to excessive complacency?

Nakin Notes is a compilation of short notes and reflections on how we got to where we are now, and what needs to change to "Make Europe Great Again".

By Miguel Benavides de la Vega

The thoughts shared here are my personal views and do not reflect the views of my employers or partners