European Nuclear Society
e-news Issue 4 Spring 2004
http://www.euronuclear.org/library/public/enews/ebulletinspring2004/infrastructure-investement.htm

EUROPEAN COMMISSION

Proposed Directive on electricity supply and infrastructure investments

The FORATOM branch of the ENS/FORATOM joint secretariat hosted a meeting at its offices in Brussels on Thursday, 18 March, for nuclear industry representatives to analyse a European Commission proposed Directive on measures to safeguard security of electricity supply and infrastructure investments.

The meeting provided the occasion for the European Parliament’s ‘Rapporteur’ for the proposed legislation, UK Conservative Giles Chichester, MEP, to express his views. Mr Chichester argued during the meeting that security of electricity supply was a complex issue that involved much more than just transmission systems. He suggested that the proposed Directive should perhaps be extended to deal explicitly with investment in generation capacity. He also said there was a need to challenge the received idea that renewables, demand-side management and combined heat and power (CHP) would cover the EU's future energy needs.

A working paper prepared by the ‘Rapporteur’ is to be discussed by the European Parliament’s Industry Committee (ITRE) in early April. Following a public hearing on the subject, to be organised by this Committee in the autumn, it is expected to vote on the legislation in late autumn, with a European Parliamentary plenary vote taking place early next year.

Participants at the FORATOM meeting agreed that regulatory measures introduced by the Commission's proposed Directive (reserve generation capacity, increased demand-side management and increased renewable energy sources) are not market-orientated and would therefore be contrary to a well-functioning competitive market.

They also argued that the assumptions contained in the Directive – that the above measures would cover the EU's future energy needs – were totally unrealistic, as conventional energy sources would still be needed in the coming decades to ensure security of electricity supply. Moreover, the need for a proposed Directive on security of electricity supply was called into question since existing EU legislation already provides tools for EU member states to deal with security of supply. The market must be given the opportunity to prove that it can deal with security of supply.

Those at the meeting also held the view that: to ensure security of supply in the EU and reduce import dependency in a liberalised environment, diversity of fuel supply should be promoted and investments in electricity generation should be based on economic considerations.