EU energy policy should guarantee the accomplishment of three objectives simultaneously – robust competitiveness, sustainable development, and energy security.

Energy poses a challenge to the world today. The task of developing a long-term energy policy for Europe – a policy that will address energy security and climate protection – is a complex one. A careful balance needs to be struck between the various factors important to the EU, including geopolitics, while bearing in mind the economic and financial conditions prevalent in Europe.

Reasonable and secure

It is in the best interest of all of Europe to ensure that energy is affordable, reasonably consumed and managed in a joint effort. Therefore, a far-sighted approach and supranational cooperation, in addition to clear initiatives and interventions on the regional and national levels, are required to enhance the continent's energy security. Economic and political instability can hinder the right choices being made. As global energy demand continues to march onwards, the energy security issue becomes ever more pressing. The envelope will be pushed of what we regard as recoverable, commercially viable resources with acceptable environmental footprints. Market developments and shifts in political agendas, especially those concerning alternative fuels, climate change and carbon emissions, will determine the commercial viability of fuels and drive related investment decisions. Accordingly, closer multilateral collaboration in the energy sector is called for.

Climate protection

The pursuit of ambitious goals for climate protection should be coupled with consistent policy supporting competitiveness. The members of the CEEP fully endorse the idea of long-term energy and climate policy seeking to reduce carbon emissions. However, they also argue that the reduction amounts and the rules governing the European emissions trading system should also reflect the economic inequalities existing between the different countries of Central Europe. The energy framework needs revamping if goals for climate protection, energy security and economic growth are to be attained. A long time has to pass in the energy sector before tangible benefits are realised from previously made investments. CAPEX programmes implemented during the current decade serve to replace infrastructure built some thirty or forty years ago. By taking a proactive approach, we can avoid costly changes and eliminate the risk of a snowball effect in the future. It is important to remember that economic conditions and political agendas in the years to come will be shaped by whether the barriers to enactment of more reasonable carbon emission regulations are overcome.

Cause for concern

The EU Energy Roadmap 2050 raises concerns, as it preserves the inequalities between the old and new member states. It is in our common interest to bury these inequalities and build a single sustainable and fast-growing economy. In 2011, GDP per capita in the old EU states was EUR 29,100 compared with the tepid EUR 9,500 reported for Central Europe. This gap has not significantly decreased over the past eight years, and yet the energy sector strategy adopted under the Energy Roadmap 2050 has failed to address the issue. It sets reduction targets for the entire EU, disregarding the relative differences between member states. For countries in Central Europe, proposals to lower emission caps in 2013-2015 raise doubts as to their achievability. There is a good chance that the enforcement of new limits will further widen the gulf between the old and new member states. Although unintended, its effects will last for years. The EU-15, with their structural problems, are also likely to end up victims of the Energy Roadmap 2050. Determining the make-up of their energy mix rests with the individual member states. However, the ongoing integration processes on the European energy market act to limit their range of movement. This issue is becoming increasingly urgent for everyone. The member states in Central Europe are doing their best to introduce new types of energy, resources and technology in their energy mix. Coal is bound to remain a key element of the system, yet natural gas, RES and nuclear will also gradually gain in importance. Implementation of Best Available Techniques will help curb carbon emissions, and odds are high that the 20% reduction target will be achieved by 2020. For instance, the ten lignite-fired power plants brought on-line in Germany last year contributed to a 30% reduction in carbon emissions. Similar projects could be implemented in Central Europe as well, but the EU is reluctant to provide us with any substantial support. The planned construction of a coal-fired power plant in Rybnik serves to illustrate the point.

The need for balance

The CEEP is aware that energy prices charged to households and industrial customers have to be reasonable, as they have a direct impact on economic growth. We believe that the common energy policy should seek a balance between energy security and sustainable development, without compromising the competitiveness of the EU member states. None of the Central European countries are big enough to form a separate energy market, therefore, interregional cooperation is crucial. Energy interdependency can prove an advantage in building strong economic bonds between neighbours. The Visegrad Group (V4), a widely appreciated and effective regional initiative, is a platform for cooperation between the Czech Republic, Poland, Slovakia and Hungary. The Group is open to forging relationships with other countries and regional organisations. Over time, the V4 has evolved towards pragmatic engagement. It relies on solidarity, protecting its members from falling into the trap of a two-speed regional initiative. This is fundamental to the energy security of the V4 countries and the region as a whole. The V4 member states work together on political agendas, while cooperation within the CEEP is undertaken on an industry level, and importantly, there exist other opportunities for furthering regional collaboration in key energy-related areas.

A busy three years

The CEEP celebrates its three-year anniversary in June. A lot has been achieved, and a lot remains to be done. The organisation's overriding goal is to promote integration of Central Europe's energy sector within the framework of the EU energy and climate policy. Currently, the CEEP brings together 18 members from the Czech Republic, Lithuania, Poland, Romania, Slovakia and Hungary, and is an active participant in the International Energy Agency (IEA). We are also partners with the European Centre for Energy and Resource Security (EUCERS), playing a role in consultations on various issues, including legislative proposals. The CEEP also hosts its own conferences and events – it organised the Energy Summit 29+1, a platform for direct dialogue between the CEEP and Günther Oettinger, EU Commissioner for Energy. The next CEEP meeting will be held on May 10th in Vilnius. During last year's session, the Budapest Memorandum was adopted, which sets guidelines to be followed by the CEEP in 2013. The document was shared with EU institutions, including the EU Commissioner for Energy. Another important event was last year's conference in Prague. Together with Ernst & Young, the CEEP presented the Prague Report, which probes the growth prospects for the energy sectors in the EU-11 countries. The Prague Report highlights the strengths and weaknesses of the EU-11 in terms of energy, while showing what an enormous amount of work has already been done to fill the gap between the EU-11 and EU-15. The report dispels misconceptions about the region, for instance that the EU-11 is ineffective in dealing with the energy sector's environmental impact. The main conclusion reached in the report is that the EU-11 countries need to tighten their energy cooperation to make their voice heard in the EU arena. This year, the CEEP has engaged Roland Berger Strategy Consultants to compile a report on how energy prices affect the competitiveness of the European energy sector. The key finding of the report is that in today's macroeconomic reality, low energy prices and the use of indigenous resources are the critical drivers of growth in Central Europe and across the EU. The report is also being presented at the GLOBSEC 2013 forum in Bratislava. In 2013, continued efforts to promote and facilitate integration of Central Europe's energy sector within the framework of EU energy and climate policy will be the CEEP's key task. While being an advocate of the 20-20-20 EU targets, we are also committed to safeguarding Central Europe's interests.