Shaping Europe’s energy sector for the decade ahead

- Position paper of FECER for the EU legislative period 2009/2014 -

FECER, the European federation of managers in the energy and energy related research
sectors (www.fecer.eu), is a member of CEC, the European Manager’s Confederation,
which in turn is acknowledged as one of the six cross-industry European
Social Partners. Representing all levels of managers and executive staff in the European
sectors of energy as well as of research serving the energy chain, FECER
raises its voice on a regular basis in order to address challenges to the European
energy community and to assist decision makers at Member State as well as European
level in achieving sustainable solutions. This is particular true in the current
phase of political change within the European institutions as well as the global financial
and economic crisis.
FECER president Dr. Matthias Hessling: “the industry sectors of our members are not
part of the present problems the global economy is facing, but strive to be part of the
solutions!”

Key demands of FECER are:

• Overcoming the global financial and economic crisis with targeted actions
  for the European energy sector
• Striving for an international climate protection agreement without undue
  burden for the EU energy value chain
• Eco-innovation without blindfold support of renewable energies
• Implementation of the Lisbon treaty
• Fighting the demographic and other employment risks in the European
  energy community whilst enhancing mobility

In more details:

1. Overcoming the global financial and economic crisis with targeted actions
   for the European energy sector whilst insisting on the EU energy
   policy objectives
   1. FECER welcomes the recently endorsed European Economic Recovery Plan,
      EERP, focusing on low CO2 emissions energy projects and improvement of
      gas interconnectors. The immediate impact on the economy as well as eligibility,
      however, appears to be massively hampered by legislative backlogs in
      some Member States, e. g. with regard to implementation of the Council directive
      on CO2 capture and storage (“CCS directive”). FECER, thus, calls upon
      the Commission and Member State governments to intensify collaboration in
      order to ensure the success of EERP.
   2. Public acceptance problems concerning certain energy sources in many European
      countries lead to continuing difficulties in achieving a balanced energy
      supply and utilization structure in pursuit of the overall objectives of EU energy
      policy. These objectives or dimensions, respectively, have been subject to
      many FECER papers and continue to be valid, namely security of energy supply,
      competitiveness of energy supply and sustainability of energy supply. FECER
      is deeply concerned about a trend to “export” problems, arising from lack
      of public support as well as from the NIMBY¹ syndrome, and about the shift
      towards increasing energy imports – particularly electricity – into Europe. It is
      FECER’s opinion that public awareness issues are best addressed at national
      level, however, given the transboundary nature of many energy projects, overall
      co-ordination, attention to time schedules and financial matters need to be
      handled at European level. European institutions should be setting the trends
      in energy policy matters.
   3. Due to the global dimension of most energy issues (such as global warming or
      limited resources), investments in improvements along the energy value chain
      need to be focused. They might well be most effective in emerging countries
      with strong growth but limited financial capacity for long-term investments (e.g.
      “DESERTEC” concept). The European Union should be in the forefront of a
      global agreement, which enables a concentration of investments where these
      have their greatest effect.
2. Striving for an international climate protection agreement without undue
   burden for the EU energy value chain
   1. FECER stresses its support to achieving a new global climate agreement as
      soon as possible, preferably by the end of this year in Copenhagen. To that
      extent, it backs the EU in its approach to offer financial aid to developing countries
      for achieving the ambitious emission mitigation targets widely agreed at
      international level.
   2. European companies and research institutions have developed a host of techniques
      and production methods during recent years which are considered
      highly energy- or eco-efficient and, thus, represent the basis for employment
      and wealth to our citizens in the years to come. Any proposal, thus, to offer
      such EU-based technologies to emerging economies in the context of the
      above negotiations without proper compensation and IPR² arrangements is rejected
      by FECER as it bears high risks of unfair exploitation and competition.
      The Commission has pointed out repeatedly, that e. g. Chinese companies are
      about to enter into global competition with their European counterparts in medium-
      and high-level technology sectors. Europe can, thus, not afford to offer
      energy- or eco-efficient technologies as give-aways at the sidelines of the
      forthcoming Copenhagen summit.
   3. In the event of a global climate agreement that will be signed also by other
      major industrialized countries, the European Union is determined to extend its
      GHG³ reduction target from 20% to 30% by 2020. Given that the EU energy
      sector will be already in pains to achieve the lower goal, striving for an even
      higher one must not result in reducing the CO2 emission cap for the energy
      sector any further.
   4. A reduction in energy consumption and CO2 emissions in absolute terms
      needs to be achieved in Europe in order to underline its pioneering role in climate
      protection. Any transfer of energy intensive industries outside of the EU
      and any “export” of high emission energy utilization to non-European countries
      are highly counterproductive towards this objective (“carbon leakage”) and,
      thus, do not constitute an improvement in global terms. Climate change is a
      global problem and, thus, global emission figures are relevant.
3. Eco-innovation without blindfold support of renewable energies
   1. It is undisputed, that innovation and creativity will be major drivers for employment,
      wealth and prosperity in Europe in the decades to come. Linking
      this issue to sustainability, the following equation has been phrased by the
      Commission to describe the EU’s medium to long-term objective:
      low-carbon economy + science-based society = eco-innovation
      It would, however, be short-sighted to limit eco-innovation in the energy sector
      to renewables as it is applicable and needed in the production as well as in the
      utilization of “classical” energy sources, too.
   2. Past eras have seen the glorification of different energy sources. While FECER
      supports a growing role of renewable energy sources in energy supply, the risks
      of over-glorification of this range of energy sources must be seen.
      This also bears the risk to miss an adequate development of alternative solutions.
      FECER, thus fully endorses the Commission in its findings about Strategic
      Energy Technologies⁴ that next to some renewable energy techniques also
      several fossil-fuel based low carbon technologies are assessed as being of
      strategic importance to Europe.
4. Implementation of the Lisbon treaty
   1. While it will not be before the ratification of the Lisbon Treaty that the European
      Commission will have a formal competency for energy policy, it has used
      the existing instruments very well. FECER welcomes the initiation and the results
      of the discussion about Europe’s future energy and climate strategy. The
      targets set (“20/20/20 %”) for energy efficiency, emissions reduction and renewables
      share as well as the concrete measures (CCS, emissions trading,
      etc.) are steps in the right direction.
   2. Important changes laid down in the Lisbon Treaty concern the emphasis on
      “solidarity” between the EU Member States in energy issues, particularly regarding
      security of supply. They also concern the accentuation of the need for
      a common foreign policy in energy matters, with the aim “to speak with one
      voice”. Both changes are welcomed by the FECER.
   3. As far as solidarity is concerned, however, it remains unclear, how solidarity
      can be guaranteed. FECER is convinced that a binding agreement is necessary,
      defining the extent and the conditions, how countries have to help each
      other in case of a crisis.
   4. With regard to a common and coherent foreign policy in energy matters, FECER
      believes that in the long run, a certain level of harmonisation of national
      energy policies should be aimed for, in order to make the concept of “speaking
      with one voice” more creditable. Such harmonisation of national energy policies,
      however, needs to be a mutually agreed process and requires a considerable
      time span for implementation. Europe-wide co-operation, increased energy
      and electricity exchange and information and marketing campaigns on
      energy issues might be helpful steps to achieve the desired degree of harmonisation.
   5. “Best is that energy which is not consumed!” – The prudent use of energy,
      expressed by energy savings and a permanent strive for higher energy efficiency,
      represent a partial solution for most of the problems at stake, such as
      - climate change,
      - growing energy import dependency,
      - public acceptance problems,
      - increasing costs of energy.
      In order to utilize the maximum potential of energy savings, a suitable political
      framework and the provision of adequate funds – above current level – are
      needed, aiming to improve research activities and to utilize innovative ideas.
      Europe should maintain its good comparative position in energy related technologies
      and should keep related jobs inside Europe.
5. Fighting the demographic and other employment risks in the European
   energy community whilst enhancing mobility
   1. As far as human resources in the EU energy value chain are concerned, we
      are about to face simultaneously scarcity of skills and substantial unemployment,
      the latter holds particularly for some regionally focussed activities such
      as coal mining operations.
   2. Whilst some major energy groups try to respond to this challenge by setting up
      “demographic risk management systems” and special recruiting measures,
      more needs to be done at political and societal level in securing managerial
      and technical skills of mature employees for the challenges ahead in the energy
      sector.
   3. On the other side, persistent calls to stop fossil fuel production such as coal
      and lignite mining only for reasons of emissions reduction become louder and
      louder. These demands that also include calls for immediate cessation of any
      state aid do not take into account the massive negative social impact in the
      mining regions if operations should need to be cut without transition period
      and ignore, that innovative technology concepts such as CO2 capture & storage,
      CCS, will enable to dramatically reduce the climate impact of coal utilization.
   4. An essential regulatory instrument to enhance urgently needed mobility of
      managers across the European energy sector is represented by the proposal
      for a “portability directive⁵”. Final negotiations aiming at adopting this proposal
      need to be resumed by Council and Parliament, eventually based on a redrafted
      Commission proposal.
   5. These quite adverse human resources challenges need to be addressed at
      EU level without further delay. FECER will be more than happy to assist the
      EU institutions in assessing as well as in preparing lasting solutions.

The way ahead:

FECER fully endorses the intention of President Barroso to develop the incoming
European Commission’s working programme towards a new “Lisbon Strategy” for the
next decade. As far as the aspects of energy policy are concerned, FECER looks
forward to reconciling the three energy policy dimensions (see section 1.2) for the
future welfare of all European citizens.

Brussels, November 2009