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EU wants $1.4 trillion for energy overhaul

By STEFAN NICOLA, UPI Europe Correspondent   |   Nov. 10, 2010 at 8:10 AM   |   Comments

BERLIN, Nov. 10 (UPI) -- Europe's top energy official Wednesday unveiled a strategy to spend about $1.4 trillion over the next decade on a common EU energy network to help blaze a trail into the new energy age.

Energy Commissioner Guenther Oettinger said the investment is needed to ensure security of supply, fair competition and a sustainable energy mix across the 27-member body. The strategy will include incentives to save energy in buildings and infrastructure as well as fast-tracking key infrastructure projects.

"Putting our energy system onto a new, more sustainable and secure path may take time but ambitious decisions need to be taken now," Oettinger said in a statement. "To have an efficient, competitive and low-carbon economy we have to Europeanize our energy policy and focus on a few, but pressing, priorities."

The $1.4 trillion would come from a combination of industry cash and taxes, and to a much lesser degree, from EU funding. Brussels is expected to commit cash to selected transnational pipeline and power grid projects in its infrastructure strategy, to be unveiled next week.

Linking the continent's energy infrastructure is a key priority for the commission, which wants to better integrate the fluctuating renewable energy sources into the aging European grid.

While transnational power and gas connections are well-developed in Scandinavia, for example, much of Eastern Europe and the Baltic states remain cut off from the Western European energy grid.

"The internal energy market is still fragmented and has not achieved its potential for transparency, accessibility and choice," the commission said.

In a bid to change that, Brussels wants the 27 EU member states to agree to by 2015 connect their markets. Oettinger is eager to prevent crises similar to the one between Russia and Ukraine in early 2009, which temporarily left much of Eastern Europe without natural gas imports during a bitter cold spell.

The European natural gas industry has reacted coolly to the commission's calls for an integrated market and more investments into trans-border connections.

Plagued by the aftereffects of the global recession that led to dropping demand for fossil fuels, gas industry officials meeting in Berlin said there wasn't enough cash to invest in large infrastructure projects if Brussels won't identify gas -- the cleanest fossil fuel -- as an important part of its future energy mix.

"Brussels has a highly theoretical vision of the market ... We need a break from regulation," Jean-Francois Cirelli, deputy chief executive of GDF Suez, one of Europe's largest utilities, said at the European Autumn Gas Conference Wednesday in Berlin.

Oettinger will put his strategy to a vote at an EU summit in February. It would tie into a wider plan to reduce the body's greenhouse gas emissions by 20 percent, increase renewable energy by 20 percent and improve efficiency -- all by 2020.

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