Sunday, April 27, 2014

Donald Tusk of Poland, sadly, has 2 fatal flaws in his argument for a European Energy Union

RAKraemer | April 27 8:41am | Permalink

Donald Tusk of Poland, sadly, has 2 fatal flaws in his argument for a European Energy Union published in the Financial Times:

First, there is no sustainable extraction and use of fossil energies. His equation of coal with energy security is logically wrong, myopic, and reveals his strong bias. Measures Poland has taken to protect the interests of her coal industry, such as keeping cheaper renewable power from entering Poland by installing phase-shifters on the borders, are in violation of the European single market.

Second, Donald Tusk fails to mention, and possibly does not understand, the degree of integration already achieved by the European Union on energy matters. The single-market and competition disciplines alone would be sufficient to break the clauses in gas contracts that prohibit the subsequent sale of gas to entities or regions without the consent of the original supplier, Russia. Such clauses are anti-competitive, and the matter could be cleared up under existing EU law.

Sadly, the good points of his argument are thus fully discredited, and he has disqualified himself as a leader of Europe‘s search for stronger cooperation over energy and the response to Russia's aggression.

There is a better way to proceed, one that can be started immediately, as it does not require changes in EU policy and law, or the creation of a new European institution: Understand that gas is important not so much for the energy it carries but primarily for its versatility and flexibility. Then, focus on linking the electricity and gas systems more and make them more flexible through storage and economic incentives in a smart grid. I have sketched it in my blog post "European Energy Policy after the Crimean Crisis: Focus on Flexibility" here:

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