In only three weeks, the Juncker commission will unveil one of its most totemic policy packages: the so-called “energy union”.
But behind the hype, key parts of the plan still seem to lack any real bite, according to documents seen by the Brussels Blog.
Overall, a single energy market makes a lot of sense as the EU is currently often a messy patchwork of 28 counter-productive energy islands. If the member states integrated their gas and electricity networks more deeply, the continent could cut costs, slash emissions and reduce dependency on Russia. Who could object to that? Well, as ever, the mood among member states is hardly harmonious.
Speaking to reporters on Wednesday, Maros Sefcovic, the EU’s vice-president charged with launching the energy union on February 25, said that the single market would comprise “hardware” and “software”.
Relatively speaking, hardware is the easy bit. Build gas pipelines and electrical cables across borders and that will improve security of supply and help prices converge.
The big hurdle is the software. Fundamentally, energy has massively different costs in various countries because of divergent tax and regulatory systems. You cannot have a free-flowing single market until you harmonise these. Poles, Czechs and Hungarians pay less than half of German and Danish rates for power. In Denmark, 57 per cent of the final electricity price is based on levies, whereas in Britain the figure is closer to 5 per cent.
So will the member states converge fully? They don’t seem to want to. Sefcovic admitted on Wednesday that taxation was a significant problem and that he had hit a wall with member states: “Most of us in this room would agree that it would be the best way forward but we have to be very realistic that unanimity on an issue like energy taxation would be very difficult to achieve.” Oh dear. That’s a pretty big hole in the energy union plan. Read more