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Zapatero : "EU must end dependancy on energy imports"

Source: Reuters - Wed 20th Jan 2010

Europe will lose its economic advantage if it does not reduce its dependence on imported gas and oil, Spain's prime minister said on Wednesday in his role at the helm of the European Union.

Jose Luis Rodriguez Zapatero said Spain would focus on economic recovery while it holds the EU's rotating presidency until the end of June.

That would be helped by further liberalizing energy grids, building links between national networks and promoting electric cars, he added.

"In the last ten years ... our energy consumption has gone up by 9 percent," Zapatero told the European Parliament in Strasbourg, France. "We need to reduce our dependence. If we don't reduce it we won't be able to have any economic growth."

About 58 percent of the gas used by Europe's homes and industry comes from outside the EU. Some 40 percent of those imports are Russian, followed by 24 percent from Norway and 20 percent from Algeria.

The 27-nation bloc woke up to its vulnerability last January, when a payment dispute between Moscow and transit country Ukraine cut imports of Russian gas into Europe during three weeks of freezing weather.

"We've moved from 44 to 53 percent in energy dependence," Zapatero said.

"These 9 extra percentage points represent 67 billion euros ($95 billion) we transfer to other countries from the EU -- it's almost exactly the same as what all European countries spend on public investment in research and development."

INTERCONNECTIONS

The first of two Spanish priorities is to extend liberalization of energy markets, a move the EU started last March with new laws to break up giant energy companies. The second is achieving improved interconnections between national grid networks for transporting gas and electricity, which would promote more competition between suppliers, drive down prices, and allow countries assist each other in energy crises.

"Europe won't gain any kind of economic competitive leadership unless it tackles energy grid interconnection decisively," Zapatero said.

European policymakers also want to encourage investment in "Smart Grids" -- highly computerized power systems capable of balancing fluctuations in supply and demand for power.

"We need to promote development of renewable energies, which by their very nature will require more versatility as far as distribution is concerned," Zapatero said.

He also highlighted the need for coordination to promote electric cars, which are likely to play a big role in any future EU policy to cut emissions from transport. "If we move forward in an integrated way as Europeans with a joint vision for electric cars, it will contribute to the climate change battle," he said

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