Opinion of the Committee of the Regions on:

- the 'White Paper on an energy policy for the European Union` and - the 'Proposal for a Council Directive to introduce rational planning techniques in the electricity and gas distribution sectors` (96/C 337/07)

THE COMMITTEE OF THE REGIONS,

Having regard to the 'White Paper on an energy policy for the European Union` (COM(95) 682 final);

Having regard to the 'Proposal for a Council Directive to introduce rational planning techniques in the electricity and gas distribution sectors` (COM(95) 369 final) ();

Having regard to the decision taken by the Council on 8 January 1996, under Article 129 and the first paragraph of Article 198c of the Treaty establishing the European Community, to consult the Committee of the Regions on the matter;

Having regard to its decision on 8 March 1996 to direct Commission 5 'Land-use Planning, Environment, Energy` to draw up the relevant Opinion;

Having regard to the Draft Opinion (CdR 2/96 rev.) adopted by Commission 5 on 16 April 1996 (Rapporteur: Mr Penttilä),

unanimously adopted the following Opinion at its 13th Plenary Session on 12 and 13 June 1996 (meeting of 13 June).

1. Introduction

1.1. The White Paper describes the Commission's energy policy objectives and measures. Energy policy, like all Community actions, should promote the core objectives set in the Treaty, in particular market integration, sustainable economic growth, job creation and prosperity for Community citizens. According to the White Paper, the following objectives are the most important for the energy sector:

- increasing the EU's competitiveness;

- ensuring energy supply; and

- promoting environmental protection.

1.2. The White Paper contains an indicative work programme for the Commission's energy policy which takes account of the subsidiarity and budgetary constraints to Community action. The action proposed in the White Paper does not go beyond the powers based on the present Treaty and they stay within the framework of the budget forecasts for the next few years. The White Paper therefore does not therefore include any proposals for amending the Treaty or any new budget spending.

1.3. Implementation of the programme will take place through the Community's present decision-making process. However, to enable changing conditions to be taken into account, the programme will be adjusted every two years and the changes specified in a report on energy policy that will be sent to the Community's various institutions.

1.4. The White Paper confines itself to the powers provided under the existing Treaty, although it identifies some limits to the EU's current competence in this area. The question of the EU's future competence for energy matters will be the subject of a separate report by the Commission.

1.5. The Committee of the Regions adopted its Opinion on the Green Paper for a European Union energy policy (COM(94) 659 final) at its Plenary Session meeting on 21 July 1995. In the Opinion, the Committee of the Regions concurred with the Commission's view that energy issues should be dealt with in a comprehensive fashion while recognizing that activities in the energy field should involve various levels:

- the European level, including issues related to the trans-European networks, monitoring of monopolies, consumer protection and common minimum requirements for environmental protection and environmental taxation;

- the Member State level; and

- the local and regional level, including the functions outlined in the Opinion.

1.6. The Committee of the Regions, referring to the subsidiarity principle, proposed that local and regional authorities should be guaranteed opportunities to achieve common goals. This required that special care be taken to see that:

- district heating technology based on common use is promoted in the energy production sector;

- the necessary conditions for the operation of plants based on local renewable energy resources are developed;

- access to power networks are ensured for local and regional energy producers;

- there is acknowledgement of the important role played by local and regional government in planning the community structure and the considerable responsibility it bears with regard to energy consumption;

- opportunities for a mixed urban structure and for practical applications of the information society would be created in order to reduce traffic;

- an environmental tax on traffic would be used to protect the environment;

- fostering competition in public transport was recognized as another important factor in this context.

1.7. The Committee of the Regions further proposed that a European Union energy policy should be examined from the point of view of consumers and citizens. Energy policy should make it possible for consumers to support energy conservation and environmentally-friendly energy use through their own decisions. Consumers do not want to buy energy, they want to buy the service that energy provides - the heat, the light and the power. It is the cost of this energy service that the European energy policy should seek to minimize, not the cost of the energy itself.

1.8. The Commission Proposal for a Council Directive to introduce rational planning in the electricity and gas distribution sectors (COM(95) 369) seeks to reduce the growth of energy use and thereby carbon dioxide emissions.

1.9. The technique of Integrated Resource Planning referred to in the Directive means planning whereby different options for meeting consumer energy demand are evaluated on an integrated basis. Demand-side management includes developing energy conservation technology and encouraging consumers to conserve energy so as to bring about a reduction in energy consumption. Local and regional government are ideally placed to assist the electricity and gas distribution companies in the implementation of their rational planning techniques.

1.10. The proposed Directive is essentially a framework instrument which gives the Member States a great deal of leeway as regards its implementation. The Directive does not require Member States to undertake individual measures but instead to implement a given programme.

2. General comments on the White Paper

2.1. The Commission's White Paper concurs in several places with the Opinion of the Committee of the Regions on the Green Paper for a European Union energy policy. The Committee notes with great satisfaction that its views have been taken on board in the Commission's Proposal. This is an excellent example of cooperation between EU institutions and of the need for local and regional views to be heard by EU institutions.

2.2. The White Paper does not say whether the Treaty on European Union should be amended with regard to energy policy. The Commission will draw up a separate report on this issue at a later stage for the 1996 Intergovernmental Conference. Consequently, the Committee of the Regions does not touch upon this question in the present Opinion. Naturally, the Committee will wish in due course to draw up an Opinion on the Commission's report.

2.3. The Opinion of the Committee of the Regions on the Green Paper on a European Union energy policy underlined the important role played by local and regional government in planning land use, transport and the community structure and thus in generating structural needs in energy consumption. The Commission has published two interesting documents on these themes, 'The citizens' network` [COM(95) 601)] and 'The common transport action programme, 1995-2000` (COM(95) 302). These are the subject of two separate Opinions of the Committee of the Regions and thus transport policy and energy consumption in the transport sector are not dealt with in this Opinion.

2.4. In its Opinion on the Green Paper the Committee of the Regions proposed that the Commission clarify the division of energy policy responsibilities between the European Union, the Member States, the regions and the local level. The division of responsibilities proposed by the Committee is, in fact, echoed at several places in the White Paper.

2.5. The White Paper pays particular attention to the role of the regions, cities and rural areas in energy policy. The Committee of the Regions wishes to emphasize the importance of this role and the need to reinforce it. Exchange of regional experience within the framework of the Save programme has its own role to play in achieving common energy policy goals. The Committee is prepared to work together with the Commission to strengthen the local and regional input.

2.6. The White Paper includes a proposal for the setting-up of an energy consultative committee to promote common objectives and provide a forum for a discussion between the various parties. Consideration should be given to the Committee of the Regions being represented on this committee.

2.7. In its work programme the Commission proposes the drawing up of a strategy for the cogeneration of electricity and heat. This proposal should be warmly welcomed. One of the central aims of the strategy should be to reduce the short-term costs associated with the capital intensity of cogeneration technology in a situation of open competition. The promotion of cogeneration should therefore be taken into account in energy taxation and in other energy policy instruments.

2.8. The Commission proposes a special debate on energy policy at local and regional level and with regard to islands. The Committee of the Regions is prepared to work together with the Commission on this matter, for example at meetings organized in connection with Europe 2000+.

2.9. The White Paper emphasizes the need to exploit renewable energy resources more fully. That implies, inter alia, hydro power, which is not mentioned in the White Paper. The need to make greater use of renewable energy resources should be more in evidence in planned energy policy measures. This goal can be achieved through cooperation with local and regional government.

2.10. There is no clear-cut proposal in the White Paper on how the European Union would guarantee local and regional energy producers access to national and European gas and electricity transmission networks. The Committee of the Regions wishes to reiterate the demand for such access, which would help to promote energy efficiency and environmental protection.

2.11. The EU's actions for promoting appropriate energy use and energy conservation could serve as important examples for the countries of Central and Eastern Europe and the Mediterranean area, where energy consumption is growing rapidly. These areas are also significant energy producers and suppliers. It would be particularly important for the intensification of cooperation in Europe to promote the construction of energy networks and appropriate energy use in areas in close proximity to the EU.

2.12. The Committee of the Regions endorses the Commission's proposals to extend European cooperation in the energy field to include countries seeking accession to the EU in accordance with the decisions made by the European Council in Essen. Local and regional authorities should be given a greater overall role in the extensive pre-accession investment programmes in these previously highly centrally-managed economies. In particular, steps should be taken to promote the capacity of local and regional authorities to evaluate different long-term options for energy production, distribution and consumption.

3. General comments on the proposal for a Directive

3.1. The aims of the Commission's proposal for a new Directive on the introduction of rational planning techniques in the electricity and gas distribution sectors coincide to a large extent with those set out in the Opinion of the Committee of the Regions on the Green Paper on energy policy. The Directive seeks to reduce the growth of energy consumption and thereby carbon-dioxide emissions.

3.2. The Directive addresses the operations of electricity and gas distribution companies. In an open market situation these companies do not necessarily produce the energy which they distribute. Similarly, consumers can choose suppliers on the basis of competitive tendering. The Directive should be amended so that it is suited to open market conditions.

3.3. A particular problem as regards implementation of the Directive is raised by Article 2c), which guarantees electricity and gas distribution companies compensation for costs they incur on energy-efficient programmes offered to customers. Compensation would be paid to distribution companies in the event of their suffering net revenue losses. Such compensation should only be granted when the right to collect these costs has been confirmed.

3.4. The Committee of the Regions proposes that a Directive require the Member States to introduce rational planning techniques in the energy sector. This requirement should be binding on all operators in the energy field, not just electricity and gas distribution companies. In introducing rational planning techniques, due regard should be given to regional and national differences, which means that it would not be possible to apply one single planning technique throughout the European Union. Due regard should also be paid to the longstanding track record of local and regional authorities in several Member States with regard to promotion of energy efficiency and support for consumer activities. This means that energy-producing companies operated by local and regional authorities will be responsible for devising planning solutions and for providing general guidance and information.

4. Conclusions concerning the White Paper

4.1. The Committee of the Regions notes that the Commission has utilized the Committee's Opinion on the Green Paper on energy policy in an exemplary manner. This is a positive example of cooperation between EU institutions and of the value of a local and regional input into EU activities.

4.2. The White Paper rightly recognizes the important role played by local and regional government in achieving common energy policy objectives. The Committee of the Regions urges the Commission to take steps to develop this role further. The Committee is prepared to participate in the preparation of the document on energy management at local and regional level mentioned in the Community action programme.

4.3. The energy consultative committee proposed by the Commission could be one way of continuing the dialogue between different operators. The Committee of the Regions is prepared to take part in the work of this committee. The Committee of the Regions also proposes that local and regional government be duly represented on the energy consultative committee.

4.4. The Committee of the Regions urges the Commission to expedite the development of the strategy for the cogeneration of electricity and gas mentioned in its work programme. Special consideration should be given to reducing the costs arising from the capital intensity of this technology.

4.5. The Committee of the Regions urges the Commission to accept the rights of local and regional energy producers to have access to national and European electricity and gas grids. Such access, which is in accordance with the principles of the internal market, would lead to more efficient energy use and diversify energy production capacity.

4.6. Energy policy actions have a particularly important role to play in the development of future EU Member States. Steps should be taken in these countries to develop the decision-making capacity of local and regional government in energy policy.

4.7. The Committee of the Regions urges the Commission to concentrate on the provision of affordable energy services, rather than cheap electricity, and to concentrate on energy demand rather than supply increases. The Commission should be working closely with regional and local government to implement such demand-side reduction measures.

5. Conclusions concerning the Draft Directive

5.1. The Committee of the Regions endorses the objectives set out in the Commission's proposal for a Directive introducing rational planning techniques in the electricity and gas distribution sectors.

5.2. The Directive is unnecessarily limited to the electricity and gas distribution sectors. Rational planning principles should be applied in all energy decision-making in the manner required by local conditions. This means that the provisions of Article 2a) of the Draft Directive are too rigid and narrow in scope.

5.3. The Committee of the Regions has doubts about the applicability of the Directive to competitive conditions in an open energy market. Problems attach to Article 2c) in terms of both principle and practicability, and it should be deleted.

5.4. The Committee of the Regions proposes that the Commission study the role to be played by local and regional government in fulfilling the objectives set in the Draft Directive. This role could involve devising planning solutions and the provision of guidance and information. This would be the best and most reliable way to support the position of the consumer and the environment.

5.5. Combined heat and power schemes should be specifically identified as measures to be considered within an integrated resource plan taking into account the total energy balance and renewable energy resources.

Done at Brussels, 13 June 1996.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA

() OJ No C 1, 4. 1. 1996, p. 6.