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I’m writing this on my way to Paris where I will participate in the informal
energy council on climate change and energy. The timing of this meeting could
not be better. Yesterday, the European Central Bank decided to raise the
interest rates to face the alarming levels of inflation in the Euro zone. Oil is
blamed as one of the causes, if not the main case, for the high prices we are
facing. Not surprisingly, oil hit yesterday a new record both in the markets of
London and New York. London’s Brent hit $146.69 per barrel, while NYMEX fell 15
cents short of reaching $146 per barrel. Both ended the day over $145. Some
people believe that oil prices will sooner or later come down as happened in
previous oil crises. Unfortunately, market operators do not seem to share this
point of view. According to today’s Financial Times, the number of financial
market bets on crude oil prices hitting $200 a barrel before the end of this
year has almost doubled in the past month.
Shrinking European oil reserves could do little to increase production. From
the offer side we are in the hands of our main oil suppliers. But we can do a
lot on the demand side, and this is precisely what European Ministers are going
to talk about today: energy efficiency.
In other entries of this blog I have already stated that Energy Efficiency is
my priority number one. The European Council has already endorsed the objective
that the EU must cost-effectively save 20% of our energy use in 2020. At an oil
price of $60, this meant a €100bn fuel saving and a reduction of CO2 by 780
million tonnes. Obviously, the potential benefits of the EU succeeding in its
energy efficiency objectives have only risen since then.
Some concrete measures in the way to reach this target will be taken next
Monday. The Regulatory Committee of the Eco-design directive will vote for first
time. They are going to approve (or refuse) new efficiency standards for standby
devices, this little red light that many of you have on your TVs, or music
centres which allow the remote control to turn them on. The consumption of
standby devices in Europe is equivalent to the whole electricity production of
Hungary. I’m therefore confident that Member States’ Representatives in the
Regulatory Committee will approve the standards proposed by the Commission,
which could lead to substantial energy savings. In the coming months, we are
going to present new standards for 20 groups of products, including street and
office lighting equipment, external power supplies, boilers, water heaters,
television and domestic lighting products, including the phasing out of
incandescent light bulbs.
When we succeed in adopting the measures for our first 20 groups of products
by 2010, this will have a huge saving potential, exceeding the energy
consumption of the Czech Republic, Denmark and
Portugal combined. The
economic savings potential is equivalent to half of the total EU budget.
New measures will come in the near future. The Commission plans to increase
the scope of the Eco-design directive not only to energy-using products, but
also to all sort of “energy-related” products, including, for instance windows,
insulation materials, etc. At the end of the year, I will propose a more
ambitious Energy Efficiency of Buildings Directive. The housing sector
represents 40% of the European final energy consumption. When fully implemented
in 2020, these changes alone will then save between 150-2000 million tonnes of
CO2 per year, or 5-6% of our total EU CO2 emissions.
Given the huge potential of energy efficiency makes perfect sense that the
French Presidency start their energy discussions talking about energy
efficiency. As I told you at the beginning I’m now in a high speed train going
to Paris to discuss about that. And I think that this is a fortunate
coincidence. Not only because the train is a more efficient mode of travel
compared with a private car for instance, but because as the International
Energy Agency said, “we need to save oil in a hurry”.
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