INTEGRATING THE UNION’S ENERGY POLICY INTO ITS EUROPEAN NEIGHBOURHOOD POLICY ADDED-VALUE OR EMULATING ITS DEFICIENCIES? By: Bart Van Vooren Prepared By : Nedal Mohamed el-Said Supervised By : Prof. Dr. Patricia Bauer Euro-Mediterranean Security and integration issues Cairo University in Egypt Faculty of Economics and Political Science PhD. Degree in Euro Mediterranean Studies

2 Contents Energy Definition. Key facts about energy and the EU. EU energy goals and priorities. An integrated energy market. Conclusion.

3 Energy Definition

What is Energy? 4 It is the ability to do work. Energy is the power to change things. It makes us grow and move and think. It runs our TVs and our cars. It bakes cakes and keeps milk cold. It warms our bodies and homes. It gives us light. Energy helps us do things.

Nature of Energy Energy is all around you! –Y–You can hear energy as sound. –Y–You can see energy as light. –A–And you can feel it as wind.

Forms of Energy The five main forms of energy are: – Heat – Chemical – Electromagnetic – Nuclear – Mechanical

7 Key facts about energy and the EU

33% of all energy in EU is used for transport 26% of all energy in EU is used by industry 41% of all energy in EU is used in buildings 2/3 of energy consumption in buildings is used for heating, cooling and ventilation The energy within the EU

The Problem “The challenges of transforming Europe’s energy system remain urgent : The EU currently imports approx. 55% of its energy – and might reach 70% in the next 20 to 30 years. In 2030 the EU will be importing 84% of its gas, 59% of its coal and 94% of its oil. In these circumstances, it is obvious that the challenge to satisfy the energy needs is big.”

10 The EU energy mix is slowly changing Fossil fuels represent up to 80% of our energy mix today. In a “business as usual” scenario, the share may still be 70% by 2030, but renewable sources are expected to account for an increasing proportion. Source: Eurostat 2010, PRIMES 2009 EU Gross inland consumption 2008 EU Gross inland consumption 2030 in % (1799 Mtoe; 2008)in % (1807 Mtoe; 2030 « business as usual »)

11 A key sector for the economy In 2008, the European electricity market was worth around 620 billion Euros. This figure represents 5% of EU GDP. In 2007, the total number of employees in the energy sector was 1.6 million, representing 1.3% of the EU economy. This represents highly qualified jobs (average personnel costs per employee in the energy sector were 40% above the average). Energy costs represent 1% to 10 % of industrial production costs (excluding personnel costs). Source: Eurostat 2011

12 Dependence on imports is likely to grow Today, Europe imports more than half of the energy it uses. If nothing changes, our dependence on fossil fuel imports will rise by Source: European Commission « Business as usual » scenario based on 2009 figures GASOIL in % 82 % 84 % 93 % 94 % 58 % 62 % 76 % 83 %

13 EU energy goals and priorities

14 EU energy goals Security of Supply Competitiveness Sustainability

15 Energy efficiency has multiple benefits Source: European Commission COMPETITIVENESS cut Europe’s energy bill by about € 200 billion / year in 2020 lower household create up to 2 million jobs by s’ bills by about €1000 per household / year 2020 Increase R&D and Create markets where EU can become a global leader SECURITY OF SUPPLY decrease the energy dependence help balance of trade alleviate the need for gas pipelines and grid investments SUSTAINABILITY improving energy efficiency and increasing the use of renewable energy sources help fight climate change: limit environnemental degradation

16 An integrated energy market

17 The EU depends on a few suppliers Source: Eurostat 2010 EU imports of natural gas Russia 40% Norway 30% Algeria 15% Nigeria 4% Others 11% EU imports of crude oil OPEC Countries 36% Russia 32% Norway 15% Kazahkhstan 5% Azerbaijan 3% Mexico 2% Others 7% Today, the EU is very reliant on a few partners for its oil and gas supplies. Diversification of routes and sources is a strategic priority for the EU. in % (2008, total = 561,46 Mt) in % (2008, total = 12,958,133 TJ)

18 Source: European Commission Extension of the EU energy market to the neighbourhood

EU Neighbours With an ENP Action Plan Egypt and Azerbaijan given that these countries both have the role of transit - (Suez, pipelines, etc.) and producer country. 19

Differentiation in the ENP Action Plans’ Energy Sections 20

Conclusion 6/4/ EU will become increasingly dependent on oil and gas imports from a turbulent neighborhood. By 2030, EU will import 90% of its oil and 80% of its gas requirements it was felt that energy security is an elusive concept. threat assessment depends on different energy choices from country to country. Different challenges also emerge depending on whether energy security is regarded over the short term or long term. Growing EU dependence on energy imports cannot be averted but can be mitigated. The focus lies on diversification (of suppliers, transport routes and energy mix) and on investment in new technologies and renewable. EU can be fully as the largest market for energy imports. The EU needs to develop and implement a coherent and focused energy security strategy, delivering added value to what Member States and market actors can do. Energy can be a source of cooperation but also of conflict.

T HANK Y OU