Opinion of the European Economic and Social Committee on a Proposal for a Decision of the European Parliament and of the Council laying down guidelines for trans-European energy networks and repealing Decisions No 96/391/EC and No 1229/2003/EC (COM(2003) 742 final – 2003/0297 (COD))
Date: 2004-06-02
Institutions: European Economic and Social Committee
Subjects: energy grid, energy policy, trans-European network

28.9.2004

EN

Official Journal of the European Union

C 241/17

Opinion of the European Economic and Social Committee on a ‘Proposal for a Decision of the
laying down guidelines for trans-European energy
European Parliament and of the Council

networks and repealing Decisions No 96/391/EC and No 1229/2003/EC’

(COM(2003) 742 final – 2003/0297 (COD))

(2004/C 241/04)

On 19 February 2004 the Council decided to consult the European Economic and Social Committee,
under Articles 156 and 251 of the Treaty establishing the European Community, on the ‘Proposal for a
Decision of the European Parliament and of the Council laying down guidelines for trans-European energy
networks and repealing Decisions No 96/391/EC and No 1229/2003/EC’.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee's work on the subject, adopted its opinion on 10 May 2004. The rapporteur was
Mrs Sirkeinen.

At its 409th plenary session of 2 and 3 June 2004 (meeting of 2 June 2004), the European Economic and
Social Committee adopted the following opinion by 164 votes for, three against and 17 abstentions.

1. Introduction

opening, into internal pipelines. Close collaboration is required
with supply countries and transit regions.

The Commission adopted in 2001 a Communication an
1.1
European Energy Infrastructure. In order for the wider Euro-
pean electricity and gas market to function effectively it is not
sufficient that common rules and standards apply. It is equally
necessary that
linking the
Member States.

infrastructure

adequate

exists

1.2
The Communication presented a number of measures,
including a target of 10 % interconnection for electricity and a
priority funding for trans-European network projects identified
as Priority Projects of European interest. The Commission has
also proposed an increase in the existing 10 % ceiling on
contribution to the development stage of projects to 20 % for
Priority Projects. The Barcelona Council endorsed the 10 %
interconnection target, but the increase of the contribution
ceiling still remains under discussion in the Council.

1.3
In order for the Accession countries to be a part of the
internal market for electricity and gas, a revision of the trans-
European network (TEN) guidelines needs to be revised. Many
projects connecting the old Community with the new Member
States already qualify for TEN funding, but the list needs to be
completed. A similar approach is needed with respect to neigh-
bouring countries. The medium-term objective is to progres-
sively create an European electricity and gas market, including
potentially more than 35 countries and a population over 600
million. This market should be based on common standards for
market opening, environmental protection and safety.

1.4
The demand for natural gas is growing rapidly, and the
Community is becoming increasingly dependent on gas
imports. To ensure the effective functioning of the European
energy market and the future supply of gas, diversifying gas
supplies and construction of new infrastructure is necessary.
Investment is needed both into new supply pipelines and, even
with more flexible use of present infrastructures after market

2. The Commission proposal

2.1
The present revision of the TENs guidelines for electri-
city and gas will, in particular, integrate the new Member States
into the framework of the internal electricity and gas market.
The new text will:

— ensure that the need to better integrate the accession coun-
tries and neighbouring regions into a wider European
energy market will be fully taken into account in the list of
projects qualifying for support and identified in the Trans-
European Energy Networks guidelines;

— introduce the Declaration of European Interest for some

key cross-border projects on the Priority Axis; and

— enable the Commission to nominate a European coordi-

nator for a Priority project.

The Communication puts obligations on Member States to give
priority to Priority projects, facilitate and speed up completion
of projects as well as to carry out assessments and report to the
Commission.

Annexes

2.2
to the Decision list projects of common
interest eligible for Community financial aid (Annex III) under
criteria laid down in Annex II, projects of common interest
that shall have priority for the grant on Community aid
(Annex I) and projects of European interest (Annex IV).

2.3
The estimated amount of investment required in the
period of 2007-2013 for the construction of priority projects
for electricity and gas networks is around EUR 28 billion, of
which EUR 20 billion in the EU and EUR 8 billion in third
countries. In addition come costs for completing other projects
of common interest.

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Official Journal of the European Union

28.9.2004

3. General comments

3.1
The EESC has in its opinions strongly supported the
proposals from the Commission on developing and supporting
TENs for electricity and gas as an integral part of creating effec-
tive internal electricity and gas markets as well as a comprehen-
sive policy for security of energy supply. The Committee has
also supported the Commission proposal of
increasing the
ceiling of financial contribution to the development stage to
20 %.

3.2
Unfortunately, as noted also in previous EESC opinions,
the realisation of TEN projects has been very slow and unsatis-
factory. Difficulties to finance extensive construction projects
have been referred to as a serious obstacle. The EUR 20 million
per year available to the Commission as contributions to the
development stage of projects can hardly have a strong influ-
ence on their realisation. Public-private partnerships need to be
developed.

3.2.1
Financing as such may not be the only obstacle to the
slow progress of TEN project realisation. There may be other
underlying reasons, like lack of commitment by Member States
to cooperate on cross-border projects. The idea of a European
coordinator may be have a role to play here. In some cases
opting for potential public funding may also have delayed the
start of a project, which would have normally been started
without the delay of waiting for one or the other decision.

Long, cumbersome and as to the end result unsure
3.2.2
planning and permit procedures are a significant obstacle to
infrastructure investments presently. Priority status given to a
project by EU institutions should serve as a clear signal of the
importance of a timely execution of the project to local and
other decision makers.

3.3
The EESC welcomes the Commission draft decision,
noting that it should preferably have been presented earlier.
When this opinion is approved by the EESC plenary, enlarge-
ment has taken place and the EU has 25 Member States. As to
approaching the neighbouring countries, the need for this in
terms of security of supply has been clearly visible for long, at
the latest since the Green Paper on security of energy supply.

The EESC finds the analyses of the interconnection situa-
3.4
tion and prospects in the different parts of the Union and
neighbouring areas informative and to the point.

Brussels, 2 June 2004.

3.5
The Commission does not, however, refer to any wider
and longer term studies of the expected developments in the
internal energy markets, which would provide the necessary
identifying key infrastructure
background information for
projects. A long term vision or alternative scenarios are all the
more important in a sector where the lifespan of investments is
50 years or more. This lack of reference is also surprising while
such information is available, including material produced by
the Commission itself.

3.5.1
The role of natural gas in the future energy scene of
Europe is of particular interest. The trend is towards rapidly
increasing use and growing dependence on imports from
outside the EU. This trend highlights the importance of mana-
ging infrastructures as well as risks involved in dependence on
a few sources and concentration of ownership. What medium
and long term prospects for demand, use location and sources
are behind the proposals for priority infrastructure projects?
How is the use for heating, electricity generation and CHP
expected to develop, as well as any potential plans for produc-
tion of hydrogen from gas? What are the potentials of sources?
Political decisions, starting from EU environment policy down
to local planning decisions, influence strongly energy choices
and markets. These should take into account the broader, long
term picture.

3.6
One relevant question is whether there might be alterna-
tive solutions to some of the bottleneck problems that the
proposed network projects are meant to solve. Would,
for
instance,
in some cases investment in electricity generation,
located close to extensive demand, be a more viable solution?
When developing network proposals this should always be
examined, taking also into account the potential of increased
energy efficiency and distributed generation from renewable
energy sources.

4. Detailed comments

4.1
Recital 4 should be reworded so as to give equal prefer-
ence to the efficient operation of the internal market and stra-
tegic goals like security of supply and universal service provi-
sion.

Projects within one Member State should qualify for the

4.2
list of projects of European interest only in exceptional cases.

The President

of the European Economic and Social Committee

Roger BRIESCH