COMMISSION STAFF WORKING DOCUMENT State of play in the EU energy policy   Accompanying document to the   COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Energy 2020 A strategy for competitive, sustainable and secure energy   {COM(2010) 639}
Date: 2010-11-10
Institutions: European Commission
Subjects: action programme, competitiveness, electrical energy, energy policy, energy saving, foreign market, gas, renewable energy, sustainable development

EN 

EN 

 
 
 
EUROPEAN COMMISSION 

Brussels, 10.11.2010 
SEC(2010) 1346 final 

COMMISSION STAFF WORKING DOCUMENT 

State of play in the EU energy policy 

Accompanying document to the 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Energy 2020 
A strategy for competitive, sustainable and secure energy 

{COM(2010) 639} 

EN 

 
 
 
 
  
 
 
 
 
 
 
Recent milestone developments:  

The past five years have significantly accelerated the construction of a comprehensive EU energy 
policy based on mutually complementing pillars of competitiveness, sustainability and security of 
supply. These developments go back to October 2005 when the European Council, gathered at the 
Informal Summit in Hampton Court, concerned by the pressing need to address the climate change 
challenge  and  to  react  to  oil  price  increase  which  approached  $70  per  barrel,  requested  the 
Commission to develop a long term and coherent energy policy.  

The  first  step  in  this  process  was  the  Commission's  Green  Paper  ''A  European  Strategy  for 
Sustainable, Competitive and Secure Energy''1.  

Next, in October 2006, the Commission adopted a comprehensive Energy Efficiency Action Plan to 
create  a  coherent  framework  of  legislation,  policies  and  measures  for  achieving  the  20%  energy 
efficiency objective compared to what was expected to happen under business as usual scenario.  

In January 2007, the Commission issued the first EU Energy Action Plan2 which was endorsed by 
the  European  Council  in  March  2007.  At  present,  most  of  the  Action  Plan  measures  have  been 
largely executed through new legislation and ongoing proposals that will soon be agreed.  

In September 2007, in order to complete the integration of the EU gas and electricity market, the 
Commission proposed further energy market liberalisation measures, the so called 'third package'. 
This legislation was agreed by the Council and the Parliament in July 20093.  

The  Strategic  Energy  Technology  (SET)  Plan4,  presented  by  the  Commission  in  November  2007 
and agreed in March 2008, introduced priorities for future energy technologies.  

In  January  2008,  the  Commission  proposed  the  Energy  and  Climate  package  with  "20-20-20  by 
2020" goals: reduction in greenhouse gas emissions to 20% below 1990 levels, 30% in the context 
of  a  global  agreement  on  climate;  20%  share  of  renewables  in  the  final  energy  consumption; 
reduction  in  primary  energy  use  to  20%  below  the  baseline  projection  for  2020,  which  were 
subsequently  translated  into  legally-binding  frameworks  for  greenhouse  gas  emissions  and 
renewable  energy5.  As  part  of  the  Energy  and  Climate  package,  the  legal  framework  for  CO2 
capture and storage (CCS) technology was also created6. 

In 2008, an action plan to strengthen EU energy security was put forward in the Second Strategic 
Energy Review7. It emphasized the importance of infrastructure links needed to strengthen energy 
security and solidarity between Member States, as well as introduced the perspective of low carbon 
economy to be achieved by 2050, which will necessitate a major shift towards low carbon energy 
technologies.  

1 
2 
3 

4 
5 

6 
7 

COM(2006) 105. 
COM(2007) 1. 
Directive 2009/72/EC, Directive 2009/73/EC, Regulation (EC) No 714/2009, Regulation (EC) No 715/2009, 
Regulation (EC) No 713/2009. 
COM(2007) 723. 
Directive  on  the  Promotion  of  the  use  of  energy  from  renewable  sources  (2009/28/EC),  Emission  Trading 
Scheme Directive (2009/29/EC) and the Effort Sharing Decision (406/2009/EC) covering non-ETS sectors 
Directive on the geological storage of carbon dioxide (2009/31/EC). 
COM(2008) 781. 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
To speed up and secure investments in infrastructure and technology projects in the energy sector, 
the European Energy Programme for Recovery8 was agreed in July 2009 allocating €3.98 billion to 
finance  mature  energy  infrastructure  and  technology  -  CCS  and  offshore  wind  -  projects  during 
2010 and 2011. This unprecedented financing stimulus package was added to the various existing 
energy financing instruments.  

Also  in  the  framework  of  the  European  Economic  Recovery  Plan9,  the  European  Regional 
Development  Fund  (ERDF)  Regulation  was  amended  in  May  200910,  expanding  the  scope  for 
sustainable  energy  investments  in  buildings.  Whereas  Regional  Policy  has  traditionally  financed 
energy  efficiency  investments  only  in  public  and  commercial  buildings,  it  is  now  possible  to  use 
these funds to improve resource efficiency in the residential sector in all Member States. Up to 4% 
of the national ERDF allocations are now available for energy investments in housing, thus adding a 
potential  EUR  8  billion  total  throughout  the  EU.  In  addition,  to  encourage  greater  use  of  market 
instruments,  another  regulatory  amendment  was  approved  in  June  201011,  extending  the  use  of 
financial  engineering  instruments  to  investments  in  energy  efficiency  and  renewable  energy  in 
buildings, including existing housing. 

Further  measures  to  strengthen  EU  internal  energy  supply  security  have  been  adopted.  A  legally 
binding framework for nuclear safety was agreed in June 2009. 

Finally, the aim of a resource efficient and low-carbon economy that is efficient in the way it uses 
all resources and the aim to decouple EU economic growth from resource and energy use, reduce 
CO2 emissions, enhance competitiveness and promote greater energy security are integral parts of 
the  Europe  2020  Strategy  for  smart,  sustainable  and  inclusive  growth12,  and  notably  the  Flagship 
Initiative 'Resource efficient Europe'.  

This  evaluation  report  aims  to  present  in  a  comprehensive  manner  main  achievements  under  the 
above mentioned EU energy policy initiatives, structured around four sectors: (i) energy efficiency 
and  savings;  (ii)  internal  energy  market,  including  consumers'  rights,  and  infrastructures' 
development;  (iii)  actions  for  a  sustainable,  secure  and  competitive  energy  supply  within  the  EU; 
and (iv) external supply security and promotion of sustainable use of energy worldwide. For each of 
the sector, an overview is given for already achieved results as well as for identified shortcomings 
which  require  further  action  during  the  Energy  202013  period  to  achieve  the  2020  EU  binding 
targets and to prepare transition towards low carbon economy by 2050. 

8 

9 
10 

11 

12 
13 

Regulation (EC) No 663/2009 of the European Parliament and of the Council establishing a programme to aid 
economic recovery by granting Community financial assistance to projects in the field of energy. 
COM(2008) 800 , 26.11.2008. 
REGULATION  (EC)  No  397/2009  OF  THE  EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL  of  6 
May 2009 amending Regulation (EC) No 1080/2006 on the European Regional Development Fund as regards 
the eligibility of energy efficiency and renewable energy investments in housing. 
REGULATION (EU) No 539/2010 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 
June 2010 amending Council Regulation (EC) No 1083/2006 laying down general provisions on the European 
Regional  Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund  as  regards  simplification  of 
certain requirements and as regards certain provisions relating to financial management. 
COM(2010) 2020. 
COM(2010) 639 [''A strategy for competitive, sustainable and secure energy'']. 

3 

 
 
 
 
 
 
 
 
 
 
                                                 
I - Reducing energy demand and promoting energy savings 

Energy efficiency and savings is the most immediate and cost-effective way of addressing the EU's 
strategic  energy  and  climate  policy  objectives  of  fighting  climate  change,  ensuring  security  of 
energy  supply  and  establishing  competitive  and  resource  efficient  economies,  while  creating  jobs 
and  making  citizens  benefit  from  lower  energy  bills  and  better  living  conditions.  It  is  widely 
recognized14  that  at  least  20%  of  EU's  primary  energy  demand  (or  368  Mtoe)  can  be  reduced  by 
2020 compared to business-as-usual PRIMES scenario of 2007 with cost-effective measures. 

Though  a  number  of  initiatives  were  undertaken  at  EU  level  since  the  mid-1990s,  the  European 
Energy  Efficiency  Action  Plan  (EEAP)15  adopted  by  the  Commission  in  October  2006  created  a 
coherent framework of legislation, policies and measures on energy efficiency and savings with a 
view  to  intensify  the  process  of  realising  the  20%  energy  efficiency  and  saving  objective.  It 
identified  six  key  areas  with  the  highest  potential  for  energy  saving  and  proposed  85  actions  and 
measures  to  be  taken  at  EU,  national  and  local  level.  EU  Heads  of  States  and  of  Governments 
endorsed, at the Spring 2007 Council, the EEAP and the 20% EU objective16.  

After years of growth, the EU primary energy consumption has stabilized in 2005 and 2006 around 
1 825 Mtoe and slightly decreased in 2007 and 200817 to reach around 1 800 Mtoe. Although the 
economic  crisis  contributed  to  this  decrease  in  energy  consumption  in  the  EU,  the  recorded 
stabilisation provides a certain confirmation of the decoupling of energy consumption and economic 
growth18.  In  addition,  EU-27  energy  intensity,  measured  as  the  ratio  of  gross  inland  energy 
consumption and the gross domestic product, has kept improving, decreasing from 187.3 in 2003 to 
167.4 in 2008 kgoe / EUR 1000 (see Annex I: EU–27 energy intensity in kgoe/EUR 1000, 2000 – 
2008). 

The latest business-as-usual scenario projections (PRIMES 2009) for the first time show a break in 
the trend of ever increasing energy demand19. 

However, EU is far from reaching its 20% objective. The projections indicate that with the rates of 
implementation of the current energy efficiency policies in Member States (until December 2009), a 
bit more than 8.9% primary energy consumption reduction will be achieved in 2020.  

14 
15 
16 
17 
18 

19 

For example SEC(2006) 1174 and Fraunhofer et al. 2009. Study for the ESD. 
COM(2006) 545. 
7224/1/07 REV 1. 
2008 Eurostat data are the latest official data. 
See  SEC(2008)  2871  and  SEC(2009)  1734,  Annual  reports  of  the  Market  Observatory  of  the  European 
Commission. 
The  scenarios  of  the  "Energy  trends  2030"  (update  2009)  are  accessible  at  the  following  address: 
http://ec.europa.eu/energy/observatory/trends_2030/doc/trends_to_2030_update_2009.pdf 

4 

 
 
 
 
 
 
 
 
 
                                                 
20% energy saving objective 
vs. expected achievements of some major EEAP energy efficiency policies 
adopted until 2009 as projected by the energy model PRIMES 

The  above  projections  do  not  take  fully  into  account  policies  in  the  pipeline,  especially  the 
forthcoming  Eco-design  implementing  measures  and  the  recast  Energy  Performance  of  Buildings 
Directive, which could provide further decrease in the consumption. Nevertheless, these projections 
give  a  good  indication  of  the  probable  gap  in  reaching  the  EU's  energy  saving  objective. 
Furthermore, while the economic crisis contributed to this decrease in energy consumption, it has 
also negatively impacted energy efficiency investment decisions at all levels - public, commercial 
and private. 

The European EEAP  has  given  a  considerable impetus to the  adoption of a  number of legislative 
and soft-law tools to capture energy savings potential. To date, progress has been achieved on most 
measures,  with  only  a  very  limited  number  seeing  little  progress  or  facing  delays  (see  Annex  II: 
Main achievements for the six EEAP key areas). Due to the overlapping effects and the early stages 
of  the  EEAP's  implementation  it  is  not  possible  to  make  concrete  quantitative  evaluation  of  its' 
overall  impact.  However,  individual  ex-ante  quantitative  impact  assessments  of  some  already 
adopted  measures  are  available20  and  Commission  is  currently  preparing  a  progress  report  on  the 
current  implementation  status  of  the  EEAP.  Considering  the  insufficient  uptake  of  the  energy 
savings potential, it is clear that more actions in this area are needed. In fact, EEAP was conceived 
as a first step towards reaching the 20% objective and its revision was foreseen for 2009. 

Despite the measures taken at EU and national levels, the existing cost-effective opportunities for 
energy savings and the related social, geopolitical and environmental benefits are yet not fully used 
in all economic sectors. This can be explained by the prevailing market failures, such as asymmetric 

20 

Impact assessment reports: http://ec.europa.eu/governance/impact/ia_carried_out/cia_2010_en.htm 

5 

 
 
 
 
 
 
 
 
 
                                                 
information,  split  incentives,  missing  or  incomplete  markets,  as  well  as  regulatory  failures, 
including  missing  norms  or  poor  implementation  of  the  existing  ones  that  in  many  cases  do  not 
allow for the legislation to have the expected impact. Therefore, in addition to full implementation 
of the current policy framework as set out in the EEAP of 2006, further concerted action is needed 
to eliminate the barriers in each sector. New action should take into account what has been achieved 
so  far  and  the  needs  of  particular  sectors  in  order  to  establish  a  coherent  policy  mix,  keeping  in 
mind  that  many  studies  indicate  that  best  results  in  energy  savings  are  reached  only  via  a  set  of 
parallel policy measures. Priorities should focus on energy performance requirements for products, 
buildings  and  services,  on  strengthening  energy  efficiency  in  the  utility  and  transport  sectors,  on 
reviewing financing mechanisms and addressing pricing aspects, as well as on changing energy use 
behaviour. 

6 

 
 
 
 
 
II  –  Deepening  the 
consumers' rights and developing infrastructures 

internal  energy  market 

integration,  strengthening 

•  Integrating the EU internal energy market 

The  competitive,  integrated  and  fluid  internal  energy  market  is  a  strategic  instrument  in  order  to 
secure energy supply, give EU consumers a choice between different companies supplying gas and 
electricity  at  reasonable  prices,  and  to  make  the  market  accessible  for  all  suppliers,  especially  the 
smallest  and  those  investing  in  renewable  forms  of  energy.  The  integrated  internal  market  is  also 
crucial for the proper functioning of CO2 emission trading mechanism. Over the coming two decades, 
the EU - like other parts of the world - has to address the need for major investments in all types of 
energy infrastructure which will be crucial to overcome the longstanding fragmentation of EU energy 
markets21. However, only a properly functioning internal electricity and gas market can send the right 
price signals to encourage investments. The integration of the EU energy market is set to continue but 
it may take some time because the planning and building of relevant infrastructure requires long time-
horizons. 

The process of opening the EU energy markets to competition started ten years ago. It has allowed EU 
citizens and industries to gain many benefits, such as more choice, more competition for better service 
and improved security of supply. Since July 2004, small-business customers in all EU countries have 
been free to switch their supplier for gas and electricity. In July 2007 all remaining consumers gained 
the same freedom (see Annex III on market opening for gas and electricity).  

Independent national regulatory authorities have been established in each EU country to ensure that 
suppliers and network companies operate correctly and actually provide the services promised to their 
customers.  Since  2003,  heads  of  the  national  energy  regulatory  authorities  meet  in  the  European 
Regulators  Group  for  electricity  and  gas  (ERGEG)  set  up  by  the  Commission.  ERGEG  acts  as  an 
advisory group, assisting the Commission in consolidating the internal market for electricity and gas. 
Based  on  yearly  reports  by  the  national  regulators,  the  European  Commission  is  monitoring  the 
market closely, identifying obstacles and shortcomings. In 2008, the Market Observatory for Energy 
of the European Commission started its activities aimed at better monitoring developments on energy 
markets, in particular gas and electricity markets, and further increasing transparency. 

A comprehensive inquiry into the electricity and gas sectors published in January 200722 revealed 
that too many barriers to competition and too many differences across the Member States remain. 
The  Commission  subsequently  came  forward  with  the  third  internal  energy  market  liberalisation 
package, which foresees, among others, the effective separation of supply and production activities 
to make the market accessible for all suppliers, harmonization of the powers of national regulators, 
better  cross-border  regulation  to  promote  new  investments  and  cross-border  trade,  effective 
transparency,  as  well  as  assuring  that  EU  and  third  country  companies  compete  in  the  EU  on  an 
equal  footing.  These  proposals  were  agreed  by  the  Council  and  the  Parliament  in  July  2009  and 
should be implemented by 201123. 

21 

22 
23 

As  for  electricity  for  e.g.,  according  to  ENTSO  for  Electricity,  investment  costs  of  transmission  projects  of 
European significance to be completed (in order to reach the objectives of the further integration of the internal 
market,  RES  integration  and  Security  of  supply)  within  the  period  2010-2014  range  between  EUR  23  to  28 
billion. See ENTSO-E’s pilot Ten-Year Network Development Plan. 
COM(2006) 851. 
Some provisions will have to be implemented by 2012 and 2013. 

7 

 
 
 
 
 
 
 
 
 
 
                                                 
In  parallel,  the  Commission  adopted  in  March  2009  the  Benchmarking  Report24  assessing  the 
implementation of the then existing internal energy market legislation. It revealed a mixed picture 
of  the  accomplishment  of  the  internal  market.  Besides  the  incomplete  implementation  of  the 
legislation  by  the  Member  States  that  the  Commission  will  continue  addressing  through 
infringement  procedures,  the  Benchmarking  Report  highlighted  the  impact  of  the  financial  and 
economic crisis on the internal energy market25. Reduced economic activity resulted in a significant 
fall  in  the  consumption  of  gas  and  electricity26.  This  lower  consumption  has  had  an  important 
impact  on  the  international  oil  prices,  which  in  turn  influenced  gas  and  electricity  prices27. 
However, the fall witnessed in international oil prices has not been entirely reflected in end user gas 
and electricity prices. The Report also indicated that there are still high levels of concentration on 
the retail and wholesale market (see Annex IV on Electricity and Gas market indicators).  

The  current  work  of  national  regulatory  authorities  is  shifting  the  focus  towards  the  consumer, 
including  the  roll-out  of  smart  meters  as  the  key  component  to  introduction  of  smart  grids  in  the 
internal  energy  market.  This  is  a  welcome  trend  that  can  lead  to  a  more  active  participation  by 
customers  in  the  internal  energy  market,  increased  energy  efficiency  and  large-scale  integration  of 
renewables, as well as additional energy services, increased market transparency and easier supplier 
switching. Additionally, cooperation between European power exchanges and the increasing levels of 
trade are a promising sign of functioning markets. This has resulted in spreading the efficient methods 
for  cross-border  trade,  namely  implicit  auctions,  in  particular  in  the  Northern  and  Western  parts  of 
Europe. A further challenge is to spread this method to areas, which are not yet applying it. 

In 2007 and 2008 a great deal of effort was put into enhancing competition on the wholesale market; 
significant  progress  was  made  through the regional initiatives such as  Baltic,  Central-East,  Central-
South, Central-West, North, South-West and the France-UK-Ireland regions for electricity and North-
West, South and South-South East regions for gas. With respect to market concentration, progress has 
generally  been  slow.  A  number  of  wholesale  markets,  in  particular,  still  suffer  from  limited 
competition and the lack of liquidity. There are signs that the situation on the retail market is about to 
improve. Member States should put even more effort into providing comprehensive data for supplier 
switching.  

While short-term solutions, such as regulated prices, might appear to be advantageous in the light of 
rapidly  increasing  energy  prices,  the  likely  consequences  of  such  measures  are  that  investor 
confidence is undermined, market entry is deterred and the full benefits of the internal energy market 
are placed at risk.  

•  Actions to strengthen consumers' rights in a liberalised energy market 

Since  the  1990's,  opening  up  retail  markets  to  competition  has  aimed  to  improve  the  services 
available to consumers and to allow free choice of supplier for consumers.  Under  EU legislation, 

24 
25 

26 

27 

COM(2010) 84. 
For detailed analyses, see the Quarterly reports on electricity and gas markets of the Market Observatory for 
Energy of the European Commission, accessible at the following address: 
http://ec.europa.eu/energy/observatory/index_en.htm 
The consumption of electricity was down by more than 5 % in the first semester of 2009 compared to the same 
period  in  2008.  In  this  period  of  time,  the  consumption  of  natural  gas  declined  by  10%.  Gross  inland 
consumption for oil fell by 1.5% in 2008 compared to 2007 and by almost 6% in the first semester of 2009 
compared to the same period in 2008. 
The crude oil price (Dated Brent) fell from approximately US$ 140 per barrel in mid July 2008 to around $70 
per barrel by the end of June 2009. Between January 2008 and June 2009, the gas price decreased by 57% on 
the NBP spot market and by 25% on the year-ahead NBP forward market  while the electricity price decreased 
by 45% on the spot market (Platts PEP) and by 6% on the forward market (DE Y+2). 

8 

 
 
 
 
 
 
 
 
                                                 
 
customers  have  clear  rights  to  choose  their  supplier,  receive  clear,  detailed  contracts  and  energy 
bills. 

In  2003,  the  Electricity  and  Gas  Directives  for  an  internal  energy  market  recognised  electricity 
provision as a universal public service, thus establishing the right to be supplied with electricity and 
gas  (subject  to  network  provision)  at  reasonable,  easily  and  clearly  comparable  and  transparent 
prices.  This  legislation  introduced  the  concept  of  protection  of  customers  in  general,  and  of 
vulnerable customers in particular, by Member States.  

The  2003  internal  market  legislation  placed  obligations  on  energy  suppliers  requiring  them  to 
achieve  levels  of  supply  quality  and  network  security  performance.  In  2008,  the  European 
regulators  carried  out  a  benchmarking  exercise  on  the  quality  of  electricity  supply28.  The  survey 
noted that overall the continuity of electricity supply in Europe is improving with customer minutes 
lost per year decreasing almost continually since 2002. 

In order to effectively benefit from offers available on the market, the limit on switching supplier 
has  been  reduced  to  six  weeks.  Switching  levels  vary  considerably  across  Member  States,  with 
some mature markets experiencing relatively high rates and a number of others showing little or no 
activity29.  

The third package on the internal market30 of 2009 increases the levels of protection for consumers 
and  improves  the  operation  of  the  retail  energy  market.  The  legislation  provides  additional 
protection  for  vulnerable  groups  which  have  to  be  defined  as  well  as  redress  mechanisms.  It  also 
places new duties on energy companies, for example, to inform consumers about such issues as the 
provenance of their electricity, or ways of saving energy. Member States are required to ensure that 
there are adequate safeguards to protect vulnerable customers, including the non-disconnection of 
electricity  in  "critical  times".  It  is  important  to  note  that  any  mechanism  adopted  to  protect 
vulnerable  consumers  must  not  interfere  with  the  operation  of  the  market  and  must  take  into 
account  other  social  policy  measures  in  the  Member  State.  It  is  in  the  interest  of  governments  to 
help  vulnerable  consumers  by  improving  their  energy  efficiency,  and  not  only  subsidizing  their 
energy bills. 

National energy regulators have the task of ensuring that consumers get the best prices, the widest 
choice of supplier and the best quality of service possible. The creation of a European Agency for 
the Cooperation of Energy Regulators will help strengthen regulators. 

To  inform  consumers  about  their  rights  and  how  to  use  them,  the  2009  legislation  introduces  a 
European  Energy  Consumer  Checklist31.  The  EU  has  also  brought  together  national  consumers 
groups,  European  umbrella  groups,  such  as  BEUC  (the  European  Consumers’  organisation),  and 
representatives of the energy industry to help raise awareness of consumers' rights within the energy 
industry and vice-versa.  

Issues of concern to consumers, such as transparency, clear billing, fair contracts and a fair dispute 
settlements procedure, are discussed and monitored at the Citizens' Energy Forum (London Forum), 
launched  in  2008.  The  Forum  brings  together  the  national  and  European  consumer  associations, 

28 
29 
30 

31 

4th Benchmarking Report on Electricity Quality of Supply Ref. C08-EQS-24-04, 10 December 2008. 
Report on retail electricity markets being prepared by Commission (SANCO) in 2010. 
Directive  2009/72/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  concerning  common 
rules for the internal market in electricity.  
Directive  2009/73/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  concerning  common 
rules for the internal market in natural gas. 
This Checklist is established to have practical answers to questions such as: who are the active suppliers in my 
area?, or where should I go if I have a complaint about my supplier?, etc. 

9 

 
 
 
 
 
 
 
 
 
 
                                                 
representatives  of  the  Member  States,  national  energy  regulators  and  representatives  of  the 
electricity and gas industry to discuss ways of improving consumer service. 

One of the main complaints from consumers is inaccurate or incomplete billing; the introduction of 
communication  technology  will  significantly  remove  this  as  an  issue  for  consumers.  The 
introduction  of  bi-directional  communication  will  allow  the  consumer  to  get  a  fair  value  for 
electricity  that  they  generate  as  well,  thus  facilitating  the  use  of  micro  and  renewable  generation. 
Member  States  are  to  have  an  active  role  in  any  rollout  by  ensuring  that  the  systems  that  are 
implemented are interoperable and adhere to the relevant international standards and best practice. 

In addition, new provisions on the introduction of Smart Metering is a key advance in the operation 
of retail markets that will result in improved retail market competition. The new devices have the 
potential  to  improve  information  for  consumers  and  therefore  provide  for  tariff  innovation. 
Consumers will be able to respond to the price signals that are provided to them, which may be to 
decrease consumption, but it may also be to increase consumption (for example by electric vehicles) 
depending  on  network  conditions.  Consumers  can  therefore  become  a  more  active  player  in  the 
market  with  the  use  of  smart  meters  featuring  the  right  functionalities  to  provide  them  with  the 
services they need, want and understand, for their own benefit.  

Nevertheless, there are still gaps between the intention of the EU legislation, to improve services to 
energy  consumers,  and  its  delivery.  Poor  implementation  or  ineffective  regulation  reduces  the 
benefits  to  consumers.  The  Commission  is  pursuing  a  number  of  Member  States  for  not  fully 
implementing EU rules for consumers. It will also produce its first Benchmarking report on energy 
consumers in November 2010.  

•  Developing infrastructures 

In  the  EU  internal  energy  market,  a  key  tool  to  promote  interconnections  is  the  trans-European 
energy  networks  (TEN-E)  programme.  Following  a  review  in  2006,  the  current  objectives  of  the 
TEN-E policy32 are to: (1) support the completion of the EU internal energy market, (2) reduce the 
isolation of less-favoured and island regions, (3) secure and diversify the EU's energy supplies also 
through co-operation with third countries, (4) contribute to sustainable development and protection 
of the environment. 

Over  the  past  years,  the  TEN-E  programme  has  positively  contributed  to  the  development  and 
operation  of  the  internal  energy  market33.  In  particular,  the  eleven  completed  cross-border 
electricity projects34 accelerated by the TEN-E policy framework have permitted increased energy 
trade  and  more  competition,  contributing  to  the  convergence  of  average  energy  prices  and 
stimulating market integration and thus the development of a true internal energy market. 

Security  of  supply  has  also  been  reinforced  through  increased  transmission  capacity  between  as 
well as within Member States, both for electricity and gas, as well as the three LNG terminal and 
gas storage projects. In this respect, TEN-E has contributed to greater diversity in gas supplies.  

Progress  has  been  more  mitigated  as  regards  the  objectives  to  reduce  the  isolation  of  peripheral 
regions  and  islands.  Four  out  of  nine  projects  are  under  construction.  The  uncertainty  over  the 
future  electricity  generation  mix  (imported  gas  versus  renewables)  is  a  brake  on  infrastructure 
developments in isolated markets. 

32 
33 
34 

Decision No 1364/2006/EC. 
SEC(2010) 505. 
Identified as being of common interest in the TEN-E framework. 

10 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
TEN-E contribution on sustainable development and the protection of the environment, a relatively 
new  addition  to  TEN-E,  has  thus  far  been  limited.  There  are  a  number  of  projects  adapting  the 
networks to increased availability of renewable energy, in the electricity as well as in the gas sector. 

In terms of political impact, TEN-E has been most effective in those projects that were selected for 
first  priority  funding,  namely  projects  of  European  interests,  and  that  had  considerable  political 
support as well as commercial potential. It has made a positive contribution to selected projects by 
giving them political visibility and helping leverage funds from the financial market. The "TEN-E 
label"  given  to  projects  with  the  highest  European  interest  and  the  creation  of  European 
Coordinators in 2006 have been conducive in delivering results. In view of these objectives some 
progress has been achieved in the implementation of the TEN-E during the past years (see Annex V 
presenting a statistical overview of the TEN-E implementation programme). 

The Second Strategic Energy Review in 2008 already streamlined several infrastructure initiatives 
as energy security priorities for the EU: the Baltic Interconnections Plan, a Southern Gas corridor 
for  gas  supply  from  Caspian  and  the  Middle  –  Eastern  sources,  LNG  capacity  expansion,  a 
Mediterranean  energy  ring,  North  –  South  gas  and  electricity  interconnections  within  Central  and 
South-East Europe, a North Sea offshore grid. In relation to the first, in June 2009, the Baltic Sea 
Region States reached an agreement on the Baltic Energy Market Interconnections Plan identifying 
a number of steps to improve energy security in the region. 

Despite  the  progress  achieved,  the  dramatic  changes  the  EU  energy  policy  framework  has 
undergone  in  the  recent  years  call  for  a  thorough  review  of  both  the  concept  and  rationale  of  the 
TEN-E framework. The programme has responded too slowly to the major energy and climate goals 
of today, and is poorly equipped to deal with the growing challenges that will arise from the 2020 
and 2050 ambitions. As examined in the November 2008 reflection exercise about a possible new 
EU  Energy  Security  and  Infrastructure  Instrument  (EESII)35  and  identified  in  the  TEN-E 
Implementation report36, the major shortcomings of the current TEN-E framework include the lack 
of  focus  and  definition  of  European  priorities,  lack  of  coordination  between  TEN-E  and  other 
energy infrastructure activities and instruments (such as structural funds, EIB interventions, as well 
as  IPA  and  ENPI/NIF  instruments  for  third  countries),  the  challenge  of  lengthy  authorisation 
procedures, lack of coordination and cooperation on trans-border projects, as well as limited TEN-E 
budget  (i.e.,  EUR  155  million  for  the  period  2007-2013,  mainly  awarding  grants  for  studies  and 
only to a minor extent for works). 

Some of the shortcomings have already been tackled, paving the way for the forthcoming EESII. In 
2009,  as  the  financial  and  economic  crisis  unfolded,  public  expenditure  interventions  to  facilitate 
investments  in  energy  networks  became  necessary.  EU  institutions  agreed  on  the  creation  of  the 
European  Energy  Programme  for  Recovery  (EEPR)37.  The  EEPR  is  a  financial  instrument  whose 
overall  objective  is  to  stimulate  recovery  from  the  downturn  affecting  the  EU  economy  while 
enhancing the achievement of the EU's energy and climate policy objectives. 

The  EEPR  was  endowed  with  a  €3,980  million  fina ncial  envelope  in  support  of  three  sub-
programmes. For gas and electricity interconnection projects, the Regulation allocated respectively 
€2,365 million; and additional €565 million to offshore  wind electricity projects; as well as €1,050 
million to carbon capture and storage projects (CCS).  

35 
36 
37 

COM(2008) 782. 
COM(2010) 203. 
Regulation (EC) No 663/2009 of the European Parliament and of the Council of 13 July 2009 establishing a 
programme  to  aid  economic  recovery  by  granting  Community  financial  assistance  to  projects  in  the  field  of 
energy. 

11 

 
 
 
 
 
 
 
 
 
                                                 
In order to maximise the impact in terms of both energy policy and economic recovery objectives, 
the EEPR focuses on a relatively small number of highly strategic projects38. The identification of 
the projects was driven by the EU energy policy orientations set out in the Second Strategic Energy 
Review, taking into account progress made in the implementation of the TEN-E programme and an 
adequate  geographical  balance,  and  consultations  with  stakeholders  in  the  areas  covered  by  the 
programme.  Other  key  award  criteria  were  the  extent  to  which  lack  of  access  to  finance  was 
delaying  the  implementation  of  the  action;  the  extent  to  which  the  Community  grant  would 
stimulate public and private investments; and the social, economic and environmental impact. 

The  EEPR  has  been  from  the  beginning  an  accelerator  of  infrastructure  investments.  Indeed,  the 
selected  projects  although  they  were  technically  mature,  however,  the  perspective  of  the 
Community  financial  support  for  capital  expenditure  has  proven  to  be  decisive  in  enhancing  the 
actual realisation of the projects. In particular, EEPR funding has proven to have a catalytic effect in 
attracting  co-financers  and  encouraging  them  to  make  investment  commitments.  This  has  made 
possible  the  setting  in  motion  of  projects  that  otherwise  could  be  delayed  or  abandoned  due  to 
funding  constraints,  particularly  severe  under  the  current  economic  circumstances.  The  EU 
contribution will have an important leverage effect. The expectation is that the €2.3 billion EEPR 
grants will help to lever up to €22 billion of privat e sector investment over the next 3 to 5 years. 

38 

COM(2010)191, Annex to the Report from the Commission to the Council and the European Parliament on the 
implementation of the European Energy Programme for Recovery. 

12 

 
 
 
 
 
 
                                                 
III – Acting for a sustainable, secure and competitive energy supply within the 
EU  

The  EU  primary  energy  consumption  represents  1800  Mtoe  (2008  data).  EU  indigenous  energy 
production covered 850 Mtoe.  

Source: Eurostat 

Therefore,  energy  imports,  representing  1015  Mtoe,  made  the  EU  dependent  on  external  energy 
supplies  to  the  level  of  54.8%  all  fuels  taken  together  (see  Annex  VI  on  EU-27  energy  demand 
developments and total final energy consumption by sectors; Annex VII on EU-27 energy imports 
dependency).  

•  Promoting renewable energy  

Renewable  energy  sources  (RES)  have  an  important  role  to  play  in  securing  diversified,  mainly 
indigenous,  energy  supplies  and  in  combating  climate  change.  Moreover,  further  deployment  of 
renewable energy technologies has a potential to create hundreds of thousands of jobs in the EU.  

Renewable  energy  production  has  grown  rapidly  in  the  last  ten  years,  especially  in  a  few  key 
Member  States  with  stable  supportive  policies.  Over  1997  -  2007  the  RES  and  waste  generation 
park39 grew by around 80 GW whereas over 1990 – 1997 developments in this area represented just 
15 GW. The RES and waste additionally installed capacity amounted to 64.4 GW over 2000-2007 
while it was only 41.9 GW for thermal power plants. Wind power now forms the highest share of 
new production capacity and in 2007, it accounted for 25% of the net RES installed capacities.  

39 

Classification category used by ESTAT. 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
EU-27 - Net installed electricity production capacity of renewable energy

480

420

360

300

240

180

120

60

0

Thermal Power Stations

Total RES and Waste

Hydro Power Stations

Wind-Turbines

)

W
G

(

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Total RES and Waste

Hydro Power Stations

Wind-Turbines

Solar

Geothermal Plants

Waste

Thermal Power Stations

Source: Eurostat 

(See Annex VIII for further details on renewable energy sources developments.)  

EU level initiatives such as the so called "Green electricity Directive" (2001/77) and the "Biofuels 
Directive"  (2003/30)  have  tried  to  stimulate  an  increase  in  the consumption  of  renewable  energy. 
The first one established an overall EU target of 21% and individual national indicative targets for 
the RES shares in the final electricity consumption to be realised by 2010. The second required that 
all  Member  States  ensure  at  least  5.75%  of  their  total  transport  fuel  consumption  comes  from 
biofuels and other renewable fuels. Despite the significant growth achieved in the use of renewable 
energy over the last couple of years, the latest EUROSTAT data on RES shares available for 2008 
(16,6%  for  green  electricity  and  3,5%  for  renewable  fuels)  indicate  that  2010  targets  will  not  be 
met. A few Member States were close to reaching their renewable electricity targets and a handful 
of  them  had  already  met  their  biofuels  targets  ahead  of  2010  reference  date.  Most  EU  countries 
however were lagging behind in their efforts to increase the share of renewables40. Next assessment 
of the Member States' progress will be issued before the end of 2010.  

The  new  legal  framework  established  by  the  Renewable  Energy  Directive41  agreed  in  December 
2008 for the first time sets out binding targets for all Member State in order to achieve the overall 
20%  renewable  energy  target  for  the  EU  by  2020.  In  addition,  the  directive  also  includes  a 
mandatory  10%  target  for  the  share  of  renewable  energy  in  transport  for  all  Member  States  and 
requires  establishment  of  National  Renewable  Energy  Action  Plans  for  the  fulfilment  of  these 
targets.  The  new  EU  framework  legislation  for  renewable  energy  also  addresses  the  problems  of 
administrative  hindrances  to  the  development  of  renewables  and  their  integration  in  the  grids,  as 
well as sustainability requirements for biofuels. By setting a longer term regulatory framework, it 
can be expected to deliver a significantly higher rate of increase in the consumption of renewable 
energy and create investor confidence over the period of the Energy Action Plan 2011-2020.  

The table below gives an insight in renewable energy developments and defined targets. 

40 
41 

COM(2009) 192, The renewable energy progress report. 
2009/28. 

14 

 
 
 
 
 
 
 
 
 
                                                 
share of 
renewable 
energy in… 

electricity 
generation 
road transport 
heating43 

final energy 
consumption 

2001 

most recent data 

13.4% (36 Mtoe) 

16.1% (47 Mtoe - 2007) 

target 2010 
(indicative) 
21% 

0.3% (1 Mtoe) 
9.1% (52 Mtoe) 

3.4% (10 Mtoe - 2008) 
11.5% (63 Mtoe - 2007) 

5.75% 
no target 

7.6% (89 Mtoe) 

9.8% (118 Mtoe - 2007) 

no target44 

target 2020 
(binding) 
no sectoral 
target 
10%42 
no sectoral 
target 
20% 

Key issues for a further successful progress with renewable energy are related to cost-effectiveness, 
technological development and sustainability.  

The  use  of  renewable  energy  still  generally  costs  more  than  conventional  energy,  although  cost 
differences  are  falling45.  To  achieve  the  targets,  support  systems  are  therefore  needed. 
Responsibility for support falls mainly on Member States.  

The  so  called  "cooperation  mechanisms",  set  up  by  the  Directive,  will  contribute  to  cost-
effectiveness by allowing cheaper renewable energy that is produced and consumed in one Member 
State,  perhaps  with  high  potential,  to  contribute  to  the  target  of  another  –  perhaps  with  less 
potential,  more  expensive  resources  but  a  higher  target46.  The  functioning  of  the  cooperation 
mechanisms will have to be evaluated by 2014. 

National  support  schemes  for  the  renewable  energy  currently  do  not  cover  projects  with  a  strong 
cross-border component, such as electricity grid development and offshore wind. Even at national 
level, more work is needed to improve the integration of renewable energy (electricity, biogas and 
biofuels) in energy distribution networks. Such integration and the increase in the number of market 
players will increase competition in all three energy sectors. In the electricity sector it should also 
reduce balancing costs. Overall, it should result in cost savings from increased trade in energy.  

The EU framework also includes guarantees of origin as a tool to help stimulate the retail market 
for  renewable  energy  products.  As  the  Commission  turns  to  improving  the  cost  effectiveness  and 
efficiency of the retail market for all elements of the energy sector, this framework will also need 
attention.   

Most  of  today's  renewable  energy  is  supplied  by  a  few  technologies:  large  hydropower,  onshore 
wind,  biomass  and  first-generation  biofuels.  Progress  towards  energy  decarbonisation  after  2020 
will  be  easier  and  cheaper  if  more  advanced  technologies,  such  as  offshore  wind,  solar  power, 
renewable  electricity  use  in  transport,  second-generation  biofuels  and  biomass  can  also  make  a 
significant contribution. These promising technologies have been known for some time. Some, such 
as  offshore  wind  and  second-generation  biofuels,  are  beginning  to  show  signs  of  good  progress. 
Others, such as electric cars, are developing more slowly. 

42 

43 
44 

45 
46 

The 2020 target can be fulfilled through the use of renewable energy in all types of transport. Energy use in 
maritime and air transport counts only for the numerator, not the denominator. 
"Heating" is a catch-all term for energy consumption that is neither for transport nor in the form of electricity. 
A 1997 White Paper established an indicative target of 12% of primary energy consumption in 2020, but this 
was not translated into legislation. 
JRC analysis and IEA analysis ''Projected costs of generating electricity: 2010 edition''. 
The Directive's targets are based on a flat-rate element and an element related to GDP per capita. They do not 
take into account potential. 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
  
                                                 
The Commission's renewable energy policy during 2011-2020 needs to lay the foundation for new 
technologies  to  make  a  major  contribution  in  the  decades  that  follow.  On  the  research  and 
development side, arrangements are being put in place in the framework of the SET Plan. On the 
implementation side, technological development is encouraged by a possibility to differentiate the 
support systems in favour of more promising technologies. The use of advanced technologies such 
as renewable electricity in transport and second generation biofuels also broadens the diversity of 
our  energy  supply  and  helps  prepare  our  energy  sector  for  evolving  into  a  low  carbon  sector.  It 
remains to be seen whether more will need to be done to increase the pace of development of new 
technologies. 

Sustainability  scheme  for  biofuels  and  bioliquids  set  up  by  Renewable  Energy  Directive  was  the 
first  of  its  type  in  the  world  and  is  still  the  most  stringent.  The  criteria  it  lays  down  apply  to  all 
biofuels  whether  domestically  produced  or  imported.  Voluntary  certification  schemes,  recognised 
by the Commission and subject to independent auditing, will play an important role.  

For other types of biomass (solid and gaseous biomass in heating and electricity), a review in early 
201047  concluded  that  sustainability  performance  is  presently  sufficient  to  avoid  the  need  for  the 
introduction  of  a  binding  European  sustainability  scheme.  The  Commission  recommended  that 
Member States choosing to introduce such a scheme at national level should use an approach that is 
consistent with each other and with the approach for biofuels. This issue will be further examined at 
the end of 2011. 

•  Demonstrating CO2 capture and storage on an industrial scale 

CO2 capture and storage (CCS) has become an integral part of European Union (EU) energy policy 
in  recent  years.  In  most  future  scenarios  the  deployment  of  CCS  is  deemed  to  be  a  necessity  for 
achieving  GHG  reduction  targets.  Analysis  by  the  International  Energy  Agency  suggests  that 
without CCS, overall costs to reduce emissions to 2005 levels by 2050 increase globally by 70%. 
However, CCS is not currently an economically viable climate change mitigation option and some 
de-risking  of  the  technology  is  required  to  enable  commercial  deployment  before  CCS  can 
contribute to these climate goals. Consequently, the European Commission has identified the need 
for a Europe-wide programme of CCS demonstration projects. 

The  first  Communication  from  the  Commission  regarding  CCS,  entitled  "Sustainable  power 
generation from fossil fuels: aiming for near-zero emissions from coal after 2020", was published in 
January 2007. The Commission undertook to determine the most suitable way to support the design, 
construction and operation by 2015 of up to 12 large-scale demonstrations of sustainable fossil fuel 
technologies in commercial power generation. Since then, all actions related to CCS and designed 
by  the  Commission  take  this  objective  into  account.  The  second  CCS  communication  entitled 
"Supporting early demonstration of sustainable power generation from fossil fuels" confirmed the 
Commission's commitment to make the technology commercially viable by 2020.  

A CCS Directive was adopted in April 2009 as part of the Energy and Climate Package and entered 
into  force  in  June  2009.  It  establishes  a  comprehensive  legal  framework  to  manage  the 
environmental  risks  of  capture,  transport  and  the  geological  storage  of  CO2  and  at  the  same  time 
removes  existing  legal  barriers  in  EU  legislation.  Whilst  the  Directive  itself  focuses  on  the 
regulation  of  storage,  risks  related  to  capture  and  transport  of  CO2  are  dealt  with  through 
amendments of related EU legislation. 

47 

COM(2010) 11, Report from the Commission on sustainability requirements for the use of solid and gaseous 
biomass sources in electricity, heating and cooling. 

16 

 
 
 
 
 
 
 
 
 
 
 
                                                 
A CCS Project Network was established in 2010 to facilitate knowledge sharing, assist with public 
engagement to raise awareness of the potential of CCS and international co-operation in knowledge 
sharing. It additionally provides participating members - large-scale demonstration projects - with a 
common European identity. 

CCS was also included in the scope of the revised ETS Directive. It ensures that stored CO2 is not 
regarded  as  emitted  and  provides  therefore  a  financial  incentive  for  CCS.  In  addition  300  m 
allowances from the New Entrants Reserve (NER) shall be available to support commercial-scale 
CCS  and  innovative  RES  demonstration  projects  in  the  territory  of  the  Union.  The  projects  to  be 
supported under the NER300 programme will be selected in a competitive procedure to be launched 
in 2010. 

Six large-scale CCS demonstration projects have already secured some funding from the European 
Energy Programme for Recovery (EEPR). A total of €1  billion has been allocated to projects in the 
UK,  Germany,  the  Netherlands,  Poland,  Spain  and  Italy.  The  NER300  funding  mechanism  will 
provide  complementary  financing  for  CCS  demonstration  project.  The  opening  of  a  call  for 
proposals is expected in autumn 2010.  

Key  issues  for  successful  CCS  progress  are  related  to  timely  deployment  of  the  demonstration 
plants,  implementation  of  the  legal  framework  by  Member  States,  and  addressing  the  issues  of 
optimal  infrastructure  deployment  and  the  current  low  levels  of  public  awareness.  The  European 
Infrastructure  Package,  scheduled  for  the  end  of  2010,  will  consider  future  needs  of  CO2 
infrastructure. 

The  most  urgent  priority  remains  the  deployment  of  large-scale  CCS  demonstration  projects  by 
2015 to prove the technology can be economically and environmentally viable around 2020. Both 
EEPR  and  NER  300  support  schemes  constitute  a  solid  base  but  in  order  to  deploy  a  successful 
demonstration exercise in Europe more is needed. The CCS Industrial Initiative under the SET Plan 
referred to below shall be a driver for addressing the outstanding needs of industry and governments 
with respect to refinement of the technologies. 

•  Completing  the  Community  safety,  security  and  non-proliferation  framework  for 

nuclear energy 

Alongside renewable energy sources, nuclear energy contributes to combating climate change and 
strengthening security of supply, by reducing EU's external dependence on oil and gas. As one of 
the cheapest low carbon energy sources, nuclear energy also contributes to the EU competitiveness. 
Over the last years, there has been a renewed and growing interest in nuclear energy which is not 
only  visible  at  global  level,  but  also  in  EU  Member  States.  A  majority  of  Member  States  have 
chosen  to  use  nuclear  energy  for  power  generation.  The  EU-27  has  the  largest  number  of 
commercial  nuclear  power  stations  in  the  world:  some  150  nuclear  reactors  are  in  operation, 
providing around one third of EU's electricity and two thirds of low carbon electricity.  

Based on the broad set of competences entrusted to the Community by the Euratom treaty, a wide 
range of initiatives have been launched over the last years with the objective to develop the most 
advanced framework for nuclear safety, security and non-proliferation. 

Nuclear  safety  is  and  will  remain  one  of  the  absolute  priorities  of  the  EU.  In  this  field,  the 
Commission  –  with  the  support  of  the  European  Council  –  brought  together  all  national  nuclear 
regulators  in  a  European  High  Level  Group  on  nuclear  safety  and  waste  management.  A 
fundamental step was the adoption in June 2009 of a Directive establishing the basic framework for 

17 

 
 
 
 
 
 
 
 
 
 
 
 
nuclear  safety48.    This  new  common  EU  framework  provides  binding  legal  force  to  the  main 
international  nuclear  safety  standards  (IAEA  fundamental  safety  principles  and  Nuclear  Safety 
Convention  -  CNS  -  obligations)  and  reinforces  the  independence  and  resources  of  the  nuclear 
energy regulatory bodies in all EU Member States. When this Directive will be implemented the EU 
will  be  the  first  major  nuclear  player  having  common  binding  nuclear  safety  rules.  Since  the 
Euratom  Community  is  a  Contracting  Party  to  the  CNS,  the  Commission  presents  the  Euratom 
Report  on  behalf  of  Euratom  and  takes  part  in  the  CNS  Review  Meetings,  alongside  the  EU 
Member States.  

In  the  context  of  enlargement  of  the  EU,  the  Commission  monitored  and  helped  with  the    safe 
decommissioning  of  nuclear  power  plants  in  Bulgaria,  Lithuania  and  Slovakia,  with  substantial 
financing  being  provided,  in  cooperation  with  the  EBRD.  In  2006,  the  Commission  published 
recommendation  on  the  management  of  financial  resources  for  the  decommissioning  of  nuclear 
installations, spent fuel and radioactive waste49.  

The Commission also made full use of all key Community instruments under the Euratom Treaty, 
in particular in the field of nuclear investments by providing Commission opinions on new build, 
radiation  protection,  research  and  technology,  nuclear  safeguards  and  international  relations.  The 
framework for nuclear safeguards has also been strengthened through the introduction of integrated 
safeguards in all EU non-nuclear weapons states with significant nuclear installations. 

Taking  into  account  the  importance  that  public  acceptance  and  transparency  play  in  relation  to 
nuclear energy, the Commission launched in 2007 the European Nuclear Energy Forum (ENEF) to 
debate risks, opportunities and transparency of nuclear energy. 

In  parallel,  Commission's  activities  were  focusing  on  investment  aspects  and  technological 
developments.  Nuclear  Illustrative  Programme,  the  so  called  'PINC  report',  giving  a  factual 
overview of investment projects was adopted and revised respectively in 200750 and 200851.  

In relation to technologies, in 2007, the Sustainable Nuclear Energy Technology Platform (SNETP; 
www.snetp.eu)  was  launched  with  the  endorsement  of  the  EC.  Its  objective  is  to  develop  and 
implement a Strategic Research Agenda covering continued safe operation of current and new-build 
light  water  reactors  (Generation  II  &  III),  the  cogeneration  of  electricity  and  heat  for  industrial 
processes  using  High  /  Very  High  Temperature  Reactors,  and  the  development  of  Generation  IV 
Fast  Neutron  Reactors  (FNR)  and  closed  fuel  cycles  for  greatly  increased  sustainability.  In 
particular, SNETP has established a Task Force of key industrial and research players to implement 
the  European  Sustainable  Nuclear  Industrial  Initiative  (ESNII)  under  the  SET  Plan.  ESNII  will 
design  and  construct  Gen-IV  FNR  prototypes  and  demonstrators  in  order  to  demonstrate  the 
technical, industrial and economic feasibility, increased sustainability through more efficient use of 
uranium resources52, and reduction of waste volumes and lifetimes. Then, in November 2009, the 
Technology  Platform  for  Implementing  Geological  Disposal  of  nuclear  waste  (IGDTP; 
www.igdtp.eu) was launched with the objective of coordinating the remaining R&D in the lead up 
to  the  construction  and  operation  by  2025  of  Europe’s  (and  the  world’s)  first  deep  geological 
repositories for high-level and long-lived radioactive waste.  

48 

49 
50 
51 
52 

Council  Directive  2009/71/Euratom  of  25 June  2009  establishing  a  Community  framework  for  the  nuclear 
safety of nuclear installations. 
2006/851/Euratom. 
COM(2007) 565. 
COM(2008) 776. 
FNRs can produce 50-100 more energy than current nuclear reactors from a given quantity of uranium. 

18 

 
 
 
 
 
 
 
 
 
                                                 
Furthermore, Statutes of the Euratom Supply Agency (ESA)53 were reviewed in 200854. In addition 
to its traditional role of ensuring supply security of nuclear materials to users in the Community by 
diversifying  supply  sources,  the  Agency  has  now  been  required  to  monitor  nuclear  market 
developments and issues regular publications.  

In the current context of renewed development of nuclear energy in the EU, the need for stronger 
EU nuclear policy actions is becoming even more evident. The EU should – in the interest of all 
Member States – complete the legal framework for nuclear energy. This should cover in particular 
the area of nuclear waste management: a proposal for a directive has been adopted on 3 November 
2010. A more harmonized approach could be introduced towards design certification and licensing, 
as  well  as  in  relation  to  civil  liability  and  education  and  training  aspects.  Moving  towards 
harmonization  in  pre-licensing  of  nuclear  power  plants  and  nuclear  liability  regimes  would  bring 
benefits in terms of increased nuclear safety, better protection and equal treatment of EU citizens, 
and a level playing field for the industry with more legal and regulatory certainty.  

•  Guiding investments into smart and low carbon energy technologies 

To  accelerate  the  development  of  low  carbon  technologies,  in  November  2007  the  Commission 
presented  the  Strategic  Energy  Technology  Plan  (SET  Plan).  Endorsed  by  the  Council  in  March 
2008, the SET Plan proposes to launch six European Industrial Initiatives (EIIs) in the areas of wind 
energy, solar energy, CO2 capture and storage, advanced nuclear fission, electricity grid as well as 
bio-energy. More Industrial Initiatives are actually in the development phase. The objective of the 
Industrial  Initiatives  is  to  pool  together  all  stakeholders  to  define  and  implement  ambitious 
technology programmes with the aim to support the reaching of the 20-20-20 targets. In addition, 
the  SET  Plan  also  proposed  the  setting  up  of  the  European  Energy  Research  Alliance  (EERA), 
pooling  together  major  European  research  organisations  and  asking  them  to  perform  Joint 
Programming in areas related to energy technologies. 

During 2008-2009, extensive work has been undertaken by stakeholders, in particular the European 
Technology Platforms (ETPs), to draft technology roadmaps for the European Industrial Initiatives, 
describing the scope of actions and defining an overall budget. This work has served as the basis for 
the Communication on Investing in Low Carbon Technology issued by the Commission in October 
2009, with EP Resolution and Council Conclusions in March 2010. The overall required budget for 
the six initial Industrial Initiatives, now complemented by a few others (i.e., Smart cities) has been 
evaluated at €80 billion over ten years which roughl y means a three fold increase from the current 
level  of  investment  (see  Annex  IX  for  Estimation  of  the  financing  needs  for  key  technology  and 
actions  proposed  in  the  SET-Plan,  2010  –  2020).  The  financing  will  have  to  come  from  different 
coordinated  sources  and  combining  diverse  funding  mechanisms:  national/EU/corporate  sources, 
public/private, and grants/loans/other financing engineering tools. The EIB will certainly be a major 
player  to  ensure  the  success  of  this  endeavour  and  specific  dedicated  tools  might  have  to  be 
designed.  In  June  2010,  four  European  Industrial  Initiatives  on  Wind,  Solar,  CCS  and  Grid  have 
been  officially  launched  in  Madrid.  At  the  same  time  as  the  launch  of  the  four  first  Industrial 
Initiatives, four Joint Programmes under EERA have also been launched on Wind, Solar, Grid and 
Geothermal  energy.  Two  other  Industrial  Initiatives  on  Advanced  Nuclear  Fission  and  Bioenergy 
are  expected  to  be  launched  in  November  2010  in  Brussels.  The  preparation  of  the  Initiative  on 
Smart Cities has also started. 

53 
54 

Established by the Euratom Treaty, Art. 52. 
2008/114/EC, Euratom, Council decision of 12 February 2008, establishing Statutes for the Euratom  Supply 
Agency. 

19 

 
 
 
 
 
 
 
 
 
                                                 
Moreover, the energy demonstration part of the 7th research Framework Programme was radically 
changed.  All  new  demonstration  projects  have  to  fulfil  very  severe  conditions  which  are  derived 
from the SET plan. Now all projects have to focus on the SET plan priorities; they have to have a 
very  significant  impact  on  energy  efficiency  and  low  carbon  energy  technologies;  industry  has  to 
commit itself to deploy the demonstrated technologies at large scale before 2020; all projects have 
to be clearly linked to the energy and climate change policy; about one third of the budget is spent 
on  the  electricity  grid  in  order  to  solve  bottlenecks  for  rapid  deployment  of  renewables.  In  2010 
projects are on average about 10 times larger in budget and about 50 to 100 times larger in impact 
than in 2006.  

Now that the research, development and technology innovation agenda of the EU energy policy is 
well  defined,  the  key  challenge  is  related  to  the  urgency  to  increase  investments  in  research, 
technology development and demonstration in all SET-Plan initiatives.  

•  Taking specific measures to strengthen supply security within the EU: 

Gas supply interruptions that the EU witnessed in early 2006, 2008, 2009 and 2010, as well as EU's 
strong  dependence  on  imports  of  petroleum  products  and  the  geopolitical  uncertainty  in  many 
producer regions, accelerated the revision of security of supply related legislation.  

Since 1968, EU legislation imposes an obligation on Member States to maintain minimum stocks of 
crude oil and/or petroleum products that can be used in the event of a supply crisis to replace all or 
part of the shortfall. In order to strengthen the Community's capacity to face a supply disruption, the 
Commission  initiated  in  November  2008  the  revision  of  the  oil  stockholding  system.  Adopted  in 
September  2009,  the  new  directive55  aligns  the  stockholding  obligation  and  the  calculation 
methodology with those of the International Energy Agency (IEA), enables the EU – both IEA and 
non-IEA  Member  States  –  to  contribute  better  to  an  IEA  action  and  improves  the  availability  of 
stocks.  Member  States  have  to  transpose  the  new  directive  into  national  legislation  by  the  end  of 
2012. A new reporting system is under development to satisfy the requirements of the directive.  

Security  of  gas  supply  is  addressed  in  several  legal  acts.  The  Gas  Directive  (2009/73/EC) 
recognizes the right of Member States to regard security of supply as a public service obligation. 
This  Directive  has  established  common  rules  for  the  internal  market  in  natural  gas  that  enable 
Member States to take the requisite measures to safeguard supply in the event of a sudden crisis in 
the  energy  market.  The  Directive  2004/67/EC  established  a  Gas  Coordination  Group  to  facilitate 
coordination  of  security  of  supply  measures  by  the  Community  in  the  event  of  a  major  supply 
disruption. This group could also assist Member States in coordinating measures taken at national 
level.  

In  2009,  the  Commission  came  forward  with  a  proposal  for  a  Regulation  concerning  measures  to 
safeguard security of gas supply with the objective to guarantee the permanent functioning of the 
internal market for gas and to establish a common legal and technical framework for tackling the 
effects of supply disruptions56. This proposal defines the responsibilities of all relevant actors, for 
instance  natural  gas  undertakings,  competent  authorities  of  the  Member  States  and  the  European 
Commission in the area of security of supply. The competent authority designated by each Member 
State is responsible for carrying out a Risk Assessment and establishing a Preventive Action Plan 
with the measures to reduce the high risks identified. This Plan lays down national measures how 

55 

56 

Council Directive 2009/119/EC of 14 September 2009 imposing an obligation on Member States to maintain 
minimum stocks of crude oil and / or petroleum products. 
COM(2009)  363  repealing  the  Directive  2004/67/EC;  the  Regulation  is  expected  to  be  adopted  in  autumn 
2010. 

20 

 
 
 
 
 
 
 
 
 
 
                                                 
the  Member  State  plans  to  fulfill  the  commonly  defined  infrastructure  and  supply  standards, 
evaluates  the  risks,  draws  up  preventive  measures  and  provides  information  on  public  service 
obligations. The competent authority is also required to establish an Emergency Plan defining the 
measures to be taken  in a crisis situation  to mitigate the  impact of a gas supply disruption. If the 
Plans  are  inconsistent,  or  national  measures  endanger  the  security  of  supply  in  another  Member 
State,  the  Commission  will  have  the  opportunity  to  require  the  modification  of  the  Plans  or 
measures. The infrastructure standard shall contribute to infrastructure development through the so-
called  N-1  standard,  which  ensures  that  the  network  is  capable  of  compensating  the  loss  of  the 
single largest gas supply infrastructure, and the obligation to establish gas flows in both directions 
on interconnections. The supply standard shall provide a common level of minimum obligations for 
the market to enable gas flows to protected customers even in extreme climatic conditions. These, 
and other additional public service obligations shall be made public thus further enhancing the level 
of  transparency  on  the  gas  market.  Cooperation  among  Member  States  and  the  Commission  is 
strengthened  both  in  the  preventive  and  in  the  crisis  management  stage.  Declaration  of  Union  or 
regional emergency shall be made by the Commission. 

Electricity  blackouts  in  the  EU  in  November  2006  have  highlighted  the  need  to  define  clear 
operational  standards  for  transmission  networks  and  for  correct  maintenance  and  development  of 
the  network.  Therefore,  in  order  to  ensure  the  functioning  of  the  internal  energy  market,  the  EU 
established  obligations  for  the  Member  States  to  safeguard  security  of  electricity  supply  and 
undertake significant investment in electricity networks57. These requirements define the adequate 
level  of  interconnection  between  Member  States,  an  adequate  level  of  generation  capacity  and 
balance between supply and demand.  

Given  the  massive  investments  in  all  types  of  energy  infrastructure  needed  in  the  EU  in  order  to 
meet  the  security  of  supply  as  well  as  the  climate  challenges  of  the  EU  energy  policy,  the 
Commission  proposed  in  2009  a  monitoring  of  investment  projects.  In  June  2010,  the  Council 
adopted a new Regulation which lays down the framework for a regular monitoring of investment 
projects in energy infrastructure within the EU58. This should increase transparency on the structural 
evolution of the EU energy system and enhance the ability of EU institutions to anticipate problems.  

In addition, a network of energy security correspondents (NESCO) of the EU Member States was 
created  in  2007  to  serve  as  a  system  for  an  early  exchange  of  information  in  case  of  signals  of 
potential supply disruptions.  

57 

58 

Directive  2005/89/EC  of  the  EP  and  of  the  Council  of  18  January  2006  concerning  measures  to  safeguard 
security of electricity supply and infrastructure investment. 
Council Regulation (EC, Euratom) Nr 617/2010 concerning the notification to the Commission of Investment 
projects in energy infrastructure within the EU and repealing Regulation (EC) No 736/1996. 

21 

 
 
 
 
 
 
 
 
                                                 
IV  -  Acting  for  EU's  external  supply  security  and  sustainable  use  of  energy 
worldwide 

Given global challenges of energy security,  slow progress globally on  combating climate change, 
EU’s  rising  external  supply  dependence,  the  emergence  of  large  new  energy  consumers,  volatile 
energy  prices  and  other  factors,  external  dimension  has  become  an  integral  part  of  the  EU's 
developing energy policy.  

Over  the  years,  successive  European  Councils,  echoed  by  the  European  Parliament,  stressed  the 
need for a common approach to external energy policy. The Energy Action Plan of 2007 called for 
enhancing  relations  with  EU's  main  supplier,  consumer  and  transit  countries,  identifying  main 
partners as well as areas for action. The second Strategic Energy Review of November 2008 called 
for  incorporating  energy  in  the  EU's  international  relations  and  its  agreements  and  external 
assistance  programmes.  It  pointed  particularly  to  the  need  for  more  robust  international  legal 
frameworks  based  on  balance  of  commitments  and  benefits  and  highlighted  the  role  of  energy 
infrastructure, including that from third countries, in the EU's efforts to enhance energy security. 

In  line  with  these  orientations,  the  Commission  over  the  last  several  years  has  established  or 
enhanced  cooperation  dialogues  with  the  world's  major  energy  players,  mainly  in  the  forms  of 
Memoranda of Understanding or energy dialogues. Often, energy cooperation takes place within the 
context of a broader multi-sector bilateral agreements and instruments, for example, in the energy 
chapters of the European Neighbourhood Policy (ENP) Action Plans, Partnership and Cooperation 
agreements,  Energy  Partnership  with  Africa,  and  the  Euromed  cooperation.  Moreover,  energy 
cooperation  with  EU's  partners  is  typically  comprehensive  in  scope,  encompassing  issues  from 
regulatory  cooperation,  infrastructure  development,  and  promotion  of  sustainable  policies  to  joint 
projects.  

Where possible, the attempt is being made to underpin these relations with solid legal provisions. 
For  example,  it  is  foreseen  that  the  bilateral  agreements  currently  under  negotiation  (such  as  the 
new  EU-Russia  Agreement,  and  Free  Trade  Agreement  and  Partnership  and  Cooperation 
Agreement with Ukraine) will include specific energy provisions, based on the EU energy acquis 
and the principles of the Energy Charter Treaty, as well as other existing international commitments 
on energy such as in the framework of the WTO.  

The  EU  coordination  in  international  organizations  such  as  the  International  Energy  Agency,  the 
Energy  Charter  and  the  G8/G20  has  strengthened,  allowing  for  a  greater  input  into  global  energy 
discussions.  

Out  of  the  notable  achievements  over  the  last  several  years  are  the  efforts  to  extend  the  Energy 
Community  Treaty  beyond  Southeast  Europe.  Moldova  became  a  full  member  in  May  2010.  The 
recent adoption of a new gas law in Ukraine paved the way for the signature in September 2010 of a 
Protocol  on  the  accession  of  Ukraine  to  the  Energy  Community.  Negotiations  with  Turkey  are 
ongoing. 

Efforts are also progressing to diversify the EU's suppliers and supply routes. EU cooperation with 
the Central Asia/Caspian region is pursued through regional cooperation (Baku Initiative) and the 
implementation  of  bilateral  Memoranda  of  Understanding  (Azerbaijan  –  November  2006, 
Kazakhstan – December 2006, Turkmenistan – May 2008). At the same time, the Commission has 
been  engaging  the  countries  in  the  region  on  establishing  a  Southern  Gas  Corridor,  including  a 
trans-Caspian  gas  link,  the  importance  of  which  was  underlined  in  the  Second  Strategic  Energy 
Review.  An  important  milestone  was  set  in  2009  with  the  signature  of  an  Intergovernmental 

22 

 
 
 
 
 
 
 
 
 
 
 
Agreement on the Nabucco gas pipeline project. The Commission, European Investment Bank and 
the World Bank are currently investigating the feasibility and possible structure of a mechanism for 
the  purchase  of  Caspian  gas,  a  "Caspian  Development  Corporation"  (CDC),  which  would  also 
examine infrastructure aspects (across the Caspian).  

The gas supply disruption in January 2009 was unprecedented event in the EU energy history. The 
EU response, including mediation efforts between Russia and Ukraine and facilitating a monitoring 
mission, showed the benefit of coordinated European action. Following the crisis, the Commission 
worked closely with  Russia  and  Ukraine on bilateral basis to take steps that could help prevent a 
similar supply interruption in the future. This included, for example, bringing together a number of 
international financial institutions with the aim of supporting Ukraine in modernising the gas transit 
system and the agreement on an Early Warning Mechanism with Russia, with objective to set up 
operational  procedures  for  notification,  consultation  and  implementation  of  solutions  in  case  of 
potential or actual oil, gas or electricity supply interruptions.  

A high priority in the EU's external relations is given to the objective of promoting sustainable and 
safe energy use, the uptake of energy efficiency and low carbon technologies worldwide.  

Having  identified  the  need  for  global  action  on  energy  efficiency,  the  Commission  has  proposed 
and  worked  closely  with  the  G8  partners  on  the  establishment  of  the  International  Partnership  on 
Energy Efficiency Cooperation (IPEEC). Agreed by the G8 countries, China, India and South Korea 
in 2008, IPEEC is a high level forum to facilitate actions that yield high energy efficiency gains and 
improvements.  

The Commission has supported the efforts to advance the uptake of renewable energy worldwide, 
including through the efforts of the new international organization in this field – the International 
Renewable  Energy  Agency  (IRENE),  which  will  promote  the  widespread  and  increased  adoption 
and sustainable use of all forms of renewable energy. 

In the nuclear field, international cooperation has been  strengthened through Euratom agreements 
with  key  partners  (revised  agreements  are  being  negotiated  with  major  EU  suppliers  of  nuclear 
materials  –  Australia  and  Canada,  while  an  agreement  with  the  Russian  Federation  is  under 
preparation), as well as with the International Atomic Energy Agency (IAEA). The right of scrutiny 
of  the  Commission59  to  any  draft  agreement  concluded  by  a  Member  State  and  a  third  Country 
ensures  coordination  of  national  and  EU  level  approaches  in  this  area.  Moreover,  the  achieved 
results  in  terms  of  nuclear  safety  and  security  at  the  EU  level  make  a  good  case  for  the  EU  to 
encourage  and  convince  third  countries  to  make  international  nuclear  safety,  security  and  non-
proliferation  standards  legally  binding.  In  the  area  of  nuclear  research,  two  major  multilateral 
frameworks - the International Thermonuclear Experimental Reactor (ITER) for fusion technologies 
and  the  Generation  IV  International  Forum  for  advanced  fission  technologies  –  contribute  to  the 
international dimension of the nuclear component of the EU SET-plan. 

Despite these developments and improved channels of cooperation, the EU still does not leverage 
an  influence  commensurate  with  its  size  as  a  regional  player,  particularly  vis-à-vis  supplier 
countries, even if it is often seen by external partners as a frontrunner in energy policy development 
and an attractive partner due to its size and the degree of market integration. 

There is thus both a need and an opportunity for the EU to assert itself more effectively in bilateral 
relations  with  key  partners  and  in  global  discussions,  pursuing  its  diversification  objectives  and 
contributing  to  global  debate  in  a  way  that  promotes  understanding  of  key  supply  and  demand 

59 

Article 103 of the Euratom treaty. 

23 

 
 
 
 
 
 
 
 
 
 
                                                 
drivers, well-functioning, open, transparent and competitive energy markets, good governance, and 
comprehensive and sustainable energy policies.  

Effective planning and coordination at the Community and Member State level, which is necessary 
to harness the EU collective weight and to avoid situations of multiple dialogues and contradicting 
messages  with  the  same  cooperation  partner,  is  not  yet  in  place.  Further  work  is  required  to 
reinforce  synergies  between  the  external  dimension  of  the  EU  energy  policy,  as  newly  defined  in 
Article  194  TFEU,  and  other  EU  policies  (trade,  development,  climate  change,  etc.)  and  their 
instruments. Finally, there is still a need to fine-tune priorities and strategies for cooperation with 
EU's main partners as well as to focus the efforts on a limited number of concrete cooperation areas 
to maximise mutual interest and benefit.  

24 

 
 
 
 
- ANNEXES - 

Annex I 

Source: Eurostat 

25 

 
 
 
 
 
 
 
 
 
 
 
 
Annex II 

Main achievements for the six key areas of the Energy Efficiency Action Plan (EEAP): 

(1) Energy performance requirements for products, buildings and services:  

Among the biggest successes of the current EEAP is the setting of an ambitious legal framework for 
buildings and products. The existing Energy Performance of Buildings Directive (2002/91/EC) and 
its recast60 go a long way for introducing ambitious but realizable energy performance requirements 
for buildings and increase consumers' awareness. 

The Eco-Design (2005/32/EC) and Energy Labelling (92/75/EEC) framework Directives and their 
recasts are significant steps with regard to product policy. The adopted nine implementing measures 
in 2008 (e.g. for electric motors, TVs and domestic, street and office lighting) and the forthcoming 
15 (e.g. water heaters, air-conditioning and ventilation) will bring very important savings. 
The  Energy  End-Use  Efficiency  and  Energy  Services  Directive  (ESD)61  has  set  the  general 
framework  for  many  saving  actions,  including  national,  indicative,  quantitative  energy  saving 
targets and National Energy Efficiency Action Plans (NEEAPs). However, its soft wording led to 
unsatisfactory progress as regards some of its provisions. 

(2) Energy efficiency in the utility sector:  

This  has  not  been  sufficiently  tackled,  and  the  progress  in  the  sector  will  mainly  result  from  the 
implementation  of  the  CHP  Directive.  Certain  improvements  due  to  the  inclusion  of  energy 
generation in the ETS are also be noted but the full potential is not achieved. 

(3) Transport:  

Energy  consumption  in  the  sector  is  still  increasing.  Nevertheless,  a  number  of  measures  and 
initiatives were adopted tackling the CO2 emissions from new passenger cars and light commercial 
vehicles, increased fuel efficiency and improved sustainability, especially in the urban areas, of the 
sector. Aviation was included in the ETS and a Sesar Joint Undertaking was established in 2007 to 
promote energy efficiency in this sector. 

(4) Financing and pricing:  

Some  progress  has  been  made  but  there  are  still  failures  that  prevent  the  investments  in  energy 
efficiency.  Innovative  financing  instruments  are  being  developed  by  EIB,  EBRD,  national 
promotional banks and private banks. Investments in energy efficiency in the residential sector were 
made eligible for support in all Member States under Cohesion Policy in May 2009 (at the outset of 
the  2007-2013  period,  they  were  eligible  only  in  EU-12)  and  the  thematic  scope  of  Financial 
Engineering  Instruments  was  extended  in  June  2010,  now  offering  an  additional  opportunity  to 
support also repayable investments in energy efficiency in buildings, including in existing housing. 
In  order  to  mobilize  the  sustainable  energy  investments  in  cities  and  regions,  'ELENA'  technical 
assistance  facility  has  been  launched  by  the  Commission  and  EIB  in  late  2009.  Investments  in 
excess of €1 billion have been enabled by the facility so far.  

(5) Changing energy behaviour:  

Some  progress  has  been  made  to  implement  the  EEAP  2006  measures  but  user  behaviour  still  a 
challenge.  A  number  of  projects  to  study  and  address  this  aspect  were  supported  under  the 
Intelligent Energy Europe Programme. Another initiative that stemmed out of the current EEAP is 
the  'Covenant  of  Mayors'  which  has  been  a  major  success  with  more  than  1900  cities,  covering 

60 
61 

COM(2008) 780. 
2006/32/EC. 

26 

 
 
 
 
 
 
 
                                                 
more  than  120  million  EU  citizens,  committing  to  go  beyond  the  20%  greenhouse  gas  reduction 
target through development and implementation of their Sustainable Energy Action Plans (SEAPs). 
More  than  85  regions,  provinces  and  networks  have  joined  the  initiative  so  far  as  supporting 
structures. The Commission has developed and implemented a methodology for development and 
monitoring  of  the  SEAPs,  including  GHG  baseline  emission  inventories  of  participating  cities. 
Further, the extension of the Covenant of Mayors concept towards the EU Neighbourhood countries 
has been launched by the Commission. 

(6) International Partnership:  

Some progress achieved with the launching of the International Partnership for Energy Efficiency 
(IPEEC) and a number of bilateral discussions. 

27 

 
 
 
 
Market opening gas & electricity: Proportion of market open to competition 

Eligible consumption TWh/ GWh by annual consumption in the country 
Source: SEC(2010)251 final 

Annex III 

% Market opening 

Electricity 

Gas 

2007 
100 
100 
100 
31,8 
100 
100 
13 
100 
100 
100 
100 
90,1 
22,29 
100 
100 
100 
74 
100 
NA 
NA 
100 
100 
100 
100 
100 
100 
100 
100 
100 

2008 
100 
100 
100 
31,8 
100 
100 
1363 
100 
100 
100 
100 
90,164 
64,4 
100 
100 
100 
100 
100 
NA 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 

2007 
100 
100 
100 
0 
100 
100 
100 
0 
100 
100 
100 
73 
24,96 
100 
100 
NAP 
100 
100 
NA 
NA 
: 
100 
42,9 
100 
100 
100 
100 
100 
100 

2008 
100 
100 
100 
0 
100 
100 
100 
0 
100 
100 
100 
90 
34,04 
100 
100 
NAP65 
100 
100 
NA 
100 
: 
100 
42,968 
100 
100 
100 
100 
100 
100 

Austria 
Belgium 
Bulgaria 
Cyprus62 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Great Britain 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania66 
Luxembourg 
Malta67 
Northern Ireland 
Norway 
Poland 
Portugal 
Romania 
Slovak Republic 
Slovenia 
Spain 
Sweden 
The Netherlands 

62 
63 
64 
65 
66 
67 

68 

No developed gas market. 
Transitional period, for 2009: 35%, 2013: 100%. 
All customers eligible except for micro-systems on all interconnected islands. 
Derogation until 2010. 
Derogation until 2010. 
No  natural gas  supply. In  view of  its  small  and  isolated  energy  system  Malta  has  been granted  a  permanent 
unconditional  and  nominative  derogation  through  Commission  Decision  2006/859/EC,  also  featuring  in  the 
electricity  internal  market  Directive  2009/72/EC.  In  view  of  this  derogation,  Malta  does  not  have  a  rate  of 
market opening 
Derogation until 2010. 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
 
  
  
29 

 
 
 
Annex IV-1 

Electricity market indicators: degree of concentration 

Very highly concentrated  
[HHI above 5000] 
Highly concentrated  
[HHI 1800-5000] 
Moderately concentrated  
[HHI 750-1800] 

Electricity (generation) 
BE, FR, EL,  LV, LU,  SK, 
CY 
CZ, DE, LT, PT, SI, RO, HU, 
DK, NO 
FI, PL, UK, ES, IT, NL, AT 

Source: Regulators’ submissions, DG TREN calculations, SEC(2010)251 final 

(HHI by capacity – sum of squared shares of individual companies) 

30 

 
 
 
 
 
 
 
 
 
 
Annex IV – 2 

Wholesale Market Position Electricity – 2007/2008 

ELECTRICITY 

Number of companies with 
more than 5 % share of 
generation capacity (%) 

Share of 3 biggest 
companies (by capacity) 
(%) 

HHI (by capacity) 

∆ 
1 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
-1 
0 
0 
0 
0 
0 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Great Britain 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Northern Ireland 
Norway 
Poland 
Portugal 
Romania 
Slovak Republic 
Slovenia 
Spain 
Sweden 
The Netherlands 
Source: Regulators data, ∆ calculations DG TREN, SEC(2010)251 final 

2007 
51,2 
99,9 
56,4 
100 
76,85 
75 
99 
68 
93 
85,4 
41 
NA 
67 
71 
61,2 
93 
84 
80 
NA 
NA 
40 
50,9 
72,5 
63,7 
85,2 
92,7 
76 
78 
61 

2008 
6 
2 
6 
1 
1 
2 
1 
4 
1 
4 
8 
1 
5 
4 
5 
1 
3 
3 
1 
4 
6 
5 
2 
5 
1 
3 
5 
3 
4 

2007 
5 
2 
6 
1 
1 
2 
1 
4 
1 
4 
8 
1 
5 
5 
5 
1 
3 
3 
1 
NA 
6 
5 
2 
5 
1 
3 
5 
3 
6 

0 
0 
0 
0 
0 
0 
0 
0 
-2 

2008 
50 
97,5 
56,4 
100 
75,31 
75 
99 
68 
93 
84,7 
42 
NA 
67,9 
86 
57,6 
94 
85 
79 
NA 
86 
43 
52,5 
72,2 
70,98 
83,9 
92,5 
72,9 
74,7 
69,9 

∆ 
-1,2 
-2,4 
0 
0 
-1,54 
0 
0 
0 
0 
-0,7 
1 

0,9 
15 
-3,6 
1 
1 
-1 
0 

3 
1,6 
-0,3 
7,28 
-1,3 
-0,2 
-3,1 
-3,3 
8,9 

2007 
NA 
8390 
NA 
1 
NA 
NA 
NA 
NA 
6960 
NA 
986 
10000 
2119 
NA 
2126 
8110 
3160 
5843 
NA 
NA 
NA 
1312,7 
4472 
1813 
6930 
7208 
1827 
NA 
1592 

2008 
NA 
7206 
NA 
1 
NA 
NA 
NA 
NA 
NA 
2008 
901 
10000 
1911 
NA 
1351 
8110 
3095 
5682 
NA 
4096 
1826 
1363,3 
4521 
2116 

∆ 

-1184 

0 

-85 
0 
-208 

-775 
0 
-65 
-161 

50,6 
49 
303 

5019,922 -1910,08 

4369 
1716 
NA 
1551  

-2839 
-111 

-41  

31 

 
 
 
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annex IV – 3 

Retail Market position Electricity – 2007/2008 

ELECTRICITY 

Number of 
nationwide 
suppliers 

Companies with market share 
over 5% in the whole retail 
market (%) 

Market share of three largest 
companies in whole retail 
market (%) 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Great Britain 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Northern Ireland 
Norway 
Poland 
Portugal 
Romania 
Slovak Republic 
Slovenia 
Spain 
Sweden 
The Netherlands 
Source: Regulators data, ∆ calculations DG TREN, SEC(2010)251 final 

2008 
10 
12 
1 
1 
310 
16 
3 
25 
17 
17 
17 
37 
78 
9 
23 
2 
2 
7 
1 
18 
26 
19 
4 
138 
176 
13 
75 
104 
21 

2008 
6 
NA 
3 
1 
3 
7 
1 
4 
1 
3 
NA 
1 
4 
4 
3 
1 
1 
4 
1 
4 
5 
6 
2 
5 
3 
7 
4 
3 
4 

2007 
7 
4 
3 
1 
3 
7 
1 
4 
1 
3 
NA 
1 
4 
4 
3 
1 
1 
3 
1 
NA 
5 
6 
2 
5 
3 
7 
4 
3 
4 

∆ 
-1 
1 
0 
0 
0 
0 
0 
0 
0 
0 

0 
0 
0 
0 
0 
0 
1 
0 

0 
0 
0 
0 
0 
0 
0 
0 
0 

2007 
64 
NA 
97,5 
100 
99 
NA 
99 
40 
94 
46,1 
NA 
100 
87,18 
85 
60 
100 
100 
93 
NA 
NA 
31,2 
44,9 
99,6 
44 
35 
68 
83,9 
NA 
NA 

2008 
62 
NA 
97,5 
100 
99 
NA 
99 
40 
97 
52 
NA 
100 
80,73 
84 
59 
100 
100 
94 
NA 
90 
36 
44,3 
99,6 
48 
60 
58 
84,8 
NA 
NA 

∆ 
-2 
NA 
0 
0 
0 

0 
0 
3 
5,9 

0 
-6,45 
-1 
-1 
0 
0 
1 

4,8 
-0,6 
0 
4 
25 
-10 
0,9 

32 

 
 
  
  
  
  
 
 
 
 
 
 
 
 
Market Structure in Import and Production of Gas 

Annex IV – 4 

Share of 3 biggest 
companies by 
available gas (%) 

GAS 

1 
0 
0 
0 
0 

∆ 
0 
2 
0 

2006 
4 
2 
1 
NA 
1 
3 
2 
1 
2 
NA 
NA 
1 
4 
NA 
3 
1 
2 
1 
NA 
NA 

Number of companies 
with more than 5 % 
share of available gas 
(%)69 
2008 
4 
4 
1 
NA 
2 
3 
2 
1 
2 
7 
NA 
1 
4 
5 
3 
1 
2 
2 
NA 
5 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Great Britain 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Northern Ireland 
Norway 
Poland 
Portugal 
Romania 
Slovak Republic 
Slovenia 
Spain 
Sweden 
The Netherlands 
Source: Regulators data, ∆ calculations DG TREN, SEC(2010)251 final 

2007 
80 
99,4 
32,47 
NA 
NA 
NA 
99 
100 
88,97 
58,65 
28 
100 
92,8 
NA 
86,7 
100 
100 
100 
NA 
NA 

100 
0 
74 
100 
100 
75 
NA 
NA 

1 
0 
3 
1 
2 
4 
NA 
1 

0 
0 
-1 
0 
1 
0 

1 
0 
4 
1 
1 
4 
5 
4 

0 
0 
0 
1 

0 
0 

-3 

2008 
86 
92 
89 
NA 
NA 
NA 
99 
100 
88 
61,82 
NA 
100 
86,9 
81,64 
85,2 
100 
100 
100 
NA 
82,7 

100 
0 
83,19 
100 
100 
66 
NA 
87,8 

∆ 
6 
-7,4 
56,53 

0 
0 
-0,97 
3,17 

0 
-5,9 

-1,5 
0 
0 
0 

0 
0 
9,19 
0 
0 
-9 

HHI 

2008 
4290 
5438 
NA 
NA 
NA 
NA 
NA 
NA 
6324 
1706 
NA 
10000 
3066 
2499 
4336 
10000 
5800 
9057 
NA 
10000 

9624 
NA 
NA 
10000 
8981 
1887 
NA 
6841,24 

69 

Note: No answer to this question was required in 2007. 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Annex IV – 5 

Structure of Gas retail market 

GAS 

Number of 
nationwide 
suppliers 

Companies with market 
share over 5% in the 
whole retail market (%) 

Market share of three 
largest companies in 
whole retail market (%) 

∆ 
0 
0 
-1 

1 
0 
0 
0 
-1 
0 

2008 
5 
NA 
4 
NA 
8 
4 
1 
6 
2 
4 
NA 
1 
7 
2 
4 
1 
2 

2008 
5 
8 
32 
1 
14 
2 
0 
1 
13 
NA 
24 
1 
14 
5 
4 
2 
2 

2007 
5 
NA 
5 
NA 
7 
4 
1 
6 
3 
4 
NA 
1 
7 
2 
3 
1 
2 
4 
NA 
NA 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Great Britain 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Northern Ireland 
Norway 
0 
Poland 
0 
Portugal 
2 
Romania 
0 
Slovak Republic 
2 
Slovenia 
0 
Spain 
0 
Sweden 
-1 
The Netherlands 
Source: Regulators data, ∆ calculations DG TREN, SEC(2010)251 final 

1 
0 
24 
1 
3 
34 
0 
14 

1 
0 
6 
1 
4 
5 
5 
3 

1 
0 
4 
1 
2 
5 
5 
4 

0 
0 
0 
1 
0 
0 

NA 
0 

NA 
4 

2007 
NA 
92,3 
32,47 
NA 
NA 
NA 
99 
NA 
98,5 
26,3 
72 
100 
75 
100 
66,5 
100 
100 
88,5 
NA 
NA 

100 
0 
83 
100 
86 
74 
NA 
NA 

2008 
80 
NA 
12,87 
NA 
47,35 
NA 
99 
NA 
NA 
35,2 
72 
100 
72,6 
100 
63,4 
100 
100 

NA 
86 

100 
0 
59,11 
100 
82 
71 
NA 
NA 

∆ 

-19,6 

0 

8,9 
0 
0 
-2,4 
0 
-3,1 
0 
0 

0 
0 
-23,89 
0 
-4 
-3 

34 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statistical overview of TEN-E programme achievements 
according to project classification70 

Annex V 

Progress with the implementation of projects of European interest, electricity lines (32 
projects) 

Diagram 1 - Projects of European Interest - Electricity lines - Progress in 
Implementation (March 2010)

6%

3%

3%

6%

18%

6%

13%

Study phase not yet started

Study phase

Authorisation phase

Construction phase 

Finalised

Authorisation / Construction phase

Study / Authorisation phase

Authorisation phase / Finalised

Construction phase / Finalised

16%

16%

13%

Reconsidered

Progress  with  the  implementation  of  projects  of  European  interest,  gas  pipelines  (10 

projects) 

Diagram 2 - Projects of European interest - Gas pipelines
Progress in implementation (March 2010)

10%

0%

40%

20%

Finalised

Authorisation/ Construction phase/
Finalised
Construction phase

Finalised / Authorisation phase

Authorisation phase

Study phase

Study phase not yet started

10%

10%

10%

70 

Numbers  include  only  those  projects  for  which  feedback  was  provided  in  the  context  of  the  TEN-E 
Survey 2010, previous stakeholder consultations and data provided by project promoters. 

35 

 
 
 
 
 
 
 
 
 
                                                 
EU-27 energy demand developments and final energy consumption by sectors  

Annex VI 

Source: Eurostat 

Source: Eurostat 

36 

 
 
 
 
 
 
 
 
 
 
 
 
EU-27 energy imports dependency 

Annex VII 

Source: Eurostat 

EU-27 net imports of energy  

Source: Eurostat 

37 

 
 
 
 
 
 
 
 
 
 
Annex VIII 

EU-27 - Annual growth rate 
of the net installed electricity production capacity of renewable energy

100%

80%

60%

)
r
g
a
(

40%

20%

0%

-20%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Total RES and Waste

Hydro Power Stations

Wind-Turbines

Solar

Geothermal Plants

Waste

Source: Eurostat 

Source: Eurostat 

38 

 
 
 
 
 
 
 
 
 
 
 
Annex IX 

Estimation of the financing needs for key technology and actions proposed in the SET-
Plan (2010-2020) 

 Sector 

Hydrogen and fuel cells 

Wind 

Solar 

CCS 

Bio-energy 

Smart Grids 

Nuclear Fission  
Smart Cities 

European Energy 
Research Alliance 
(EERA) 

Total  
Current investment 
contributing to these 
objectives 
Additional financial 
needs 

Estimated 
investment 
needed for the 
next 10 years 
(B€) 

5 

5.5 

16 

10.5 - 16.5 

8.5 

2 

5 - 10 
10 - 12 

5 

67.5 - 80.5 
14 - 20 

47.5 – 60.5 

Justification for the estimation 

Updated estimation of resources needed made by 
stakeholders – 'Implementation Plan' of the hydrogen and 
fuel cell technology platform (Study by the JRC) 
Estimation of resources needed made by stakeholders – 
Costing of the Wind Industrial Initiative 
Estimation of resources needed made by stakeholders – 
Costing of the Solar Industrial Initiative 
Estimation of resources needed made by stakeholders – 
Costing of the CCS EII (including the 7-12 B€ CCS 
demonstration projects - Study by McKinsey) 
Estimation of resources needed made by stakeholders– 
Costing of the Bio-fuels Industrial Initiative 
Estimation of resources needed made by stakeholders for 
transmission and by Commission for distribution – Costing 
of the Smart Grid Industrial Initiative 
Estimation of resources needed made by stakeholders – 
Costing of the Nuclear fission Industrial Initiative 
Estimation based on experience from CIVITAS and 
CONCERTO initiatives and reviewed by the JRC 
Estimation of resources needed made by the Commission in 
consultation with EERA – Based on input from EERA 
assuming that 30% of their future activities are jointly 
planned and implemented. 

The Commission estimates that 50 to 70% of the current 
investment can be directed to these objectives. 

39