WRITTEN QUESTION E-0959/01

by Erik Meijer (GUE/NGL) to the Commission

(30 March 2001)

Subject: Increase in electricity generated from coal and nuclear energy and shutdown of environmentally compatible power stations following liberalisation of the energy market

1. Is the Commission aware that since early this year, as a result of liberalisation, the Netherlands has been importing 30 % of its electricity requirements from Germany, France and Belgium and that a number of power stations have been shut down as a result?

2. Can the Commission confirm that these imports are principally the result of the growing price differences between coal, brown coal and nuclear energy from electricity-exporting countries and, on the other hand, natural gas and combined heat and power in which the Netherlands has invested heavily in recent years in order to cut emissions of CO2 and other environmental effects?

3. What is the Commission's view of the fact that as a result of this development residual heat from production processes and plants with a high energy efficiency is unutilised and that although emissions of CO2 are falling in the Netherlands they are increasing considerably in other Member States, and hence the European Union as a whole is less able to meet the Kyoto obligation to reduced emissions?

4. Can the Commission confirm that Dutch imports will continue to rise substantially in the next few years if the cross-border high voltage grid acquires a greater capacity?

5. Does the Commission agree that regions which are over-dependent on electricity generated elsewhere run the risk by analogy with the American state of California of not having enough electricity in a few years' time or of being only able to buy in at elevated prices in times of shortage, and that this effect will be aggravated if the regions which currently export are obliged, in order to satisfy environmental requirements, to curtail their exports?

6. What action is the Commission planning to take to guarantee continued availability and production of electricity, to restrict the need for further growth in the high-voltage network which is a blot on the landscape to counteract harmful effects on the environment and to enable consumers to refuse the use of nuclear energy, which they do not want?

Answer given by Mrs de Palacio on behalf of the Commission

(31 May 2001)

1. The Commission is aware of the fact that the Netherlands imports part of its electricity demand. In fact, the Netherlands has always relied for around 15 % of its energy consumption on imports from other Member States. It is true that the part of imported electricity has increased since liberalisation began, and is now estimated at around 20 % of Dutch consumption. The physical capacity of the interconnectors with Belgium and Germany would, however, not allow an import of 30 % of Dutch consumption. The Honourable Member of Parliament is right that some of the installed capacity in the Netherlands is not being used at the moment, because of the fact that the price of imported electricity is cheaper.

2. The creation of an internal market results in consumers seeking to take advantage of price differences between different companies. It is true that currently electricity generated by coal or nuclear plants is cheaper than electricity generated by gas fired or cogeneration plants. The evolution of electricity prices is, however, hard to predict and depends, among others, on the development of the oil price, but also on accompanying policies such as taxation and increasing internalisation of external costs. The Commission supports the development of increasing internalisation of external costs of different forms of electricity generation.

3. Market liberalisation leads to the most efficient and economic use of fuels. Existing experience shows a significant reduction in greenhouse emissions in Member States that have fully opened their market due to the rapid replacement of old inefficient power plants. Both in the gas and electricity market the provision of advice to customers on energy efficiency and energy saving is now more extensive than prior to liberalisation.

The Commission believes, however, that any consequences of liberalisation that might be detrimental to the environment have to be countered. As highlighted in the Green Paper on Security of Supply(1), the Commission must continue to take demand side measures to counter the increase in energy consumption.

For these reasons, the Commission in 2000, tabled a Proposal for a Directive(2) on electricity from renewables, which is near adoption. The Commission adopted on 25 April 2001 a proposal for a Directive on energy saving in buildings(3) (once implemented will lead to a 20 % reduction in Community's greenhouse gas emissions, through the obligation to use existing and commercially viable technologies). In addition it will put forward a proposal for Directive on energy efficiency in electric and electronic equipment.

In 2002 the Commission will propose a Directive on Combined Heat and Power (co-generation) with a view to the promotion of its use on a European scale.

4. The Honourable Member is right in pointing out that the interconnection capacity of the Netherlands is scheduled to increase with an additional 1 000 Megawatt in the near future. This increases the import possibilities of the Netherlands, but at the same time it increases its export possibilities.

5. Current overcapacity in most of the European network makes the occurrence of Californian type problems in the Community unlikely. A host of other factors has contributed to the current electricity crisis in California, among these are excessively long planning procedures of around seven years and the fact that virtually no new capacity had been built for ten years, while demand in the same period increased rapidly. These factors are not present in the Community. In addition, an increased capacity for energy trading between Member States will ensure that it is possible to respond to unexpected increases in demand within a single Member State.

However, the Commission does find it important to monitor the development of the supply and demand balance. For this reason in its proposed Directive, it introduces an obligation on the Member States to monitor the demand/supply balance on a yearly basis and to report on this to the Commission. Should a potential disruption between supply and demand be foreseen, the Member States are obliged to take the appropriate measures that will prevent such a situation from developing.

6. The proposed Directive also contains an obligation on Member States to take measures if development or maintenance of the gas/electricity networks should not be sufficient to maintain security of supply. In addition to these measures, the Commission will propose in the near future a European infrastructure plan with which existing bottlenecks in the electricity and gas networks in the internal market can be resolved, through use of Trans European Network funds and through support at the highest political level for these infrastructure projects.

Finally on consumer choice, the Commission proposes in the draft Directive to oblige suppliers to specify on their bills to final consumers the sources of energy used to produce the electricity they sell. In a liberalised market, this may encourage electricity companies

to compete for customers on the basis of their environmental benefits. If enough customers are prepared to take this opportunity to use their purchasing power then they will be able to make a real difference to the balance of sources of energy supply in the Community.

(1) COM(2000) 769 final.

(2) OJ C 311 E, 31.10.2000.

(3) COM(2001) 226.