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Together with the Finnish Innovation Fund SITRA the Alfred Herrhausen Society organized a conference on the Topic: “Energizing Europe“ that took place on September 26–28, 2007 in Helsinki.
From September 26 to 28, Sitra, the Finnish Innovation Fund, and the Alfred Herrhausen Society, the International Forum of Deutsche Bank, held a conference on European energy and environmental policy in the Suomenlinna Sea Fortress in Helsinki. Under the title “Energizing Europe”, the conference brought together government and EU officials, businesspeople and journalists to discuss how to ensure a safe and reliable energy supply. Participants also discussed the role of a common EU energy policy in the bloc’s external relations.
Today’s energy and environmental policies must take into account tomorrow’s demographics, said Klaus Töpfer, former director of the United Nations Environment Programme, in remarks opening the first session. Africa and Asia’s population will grow rapidly and move more and more into cities, while developed countries will face depopulation and urban decline. Mr. Töpfer recommended broadening supply sources in a less carbon-intensive way and influencing the demand side toward more sustainable consumption in response to these changes. Climate change policies in particular should combine mitigation in developed countries and adaptation in developing ones, he added, calling for Europe to invest in climate-robust infrastructure in the developing world.
The second panel examined EU–Russian energy relations. Sergey Sirenko, a consultant in Russia’s fuel and energy sector, said the economic basis for energy cooperation was strong, but noted relations between Moscow and Brussels remain tense. He urged Europe to be patient with Russia’s undemocratic model of capitalism, saying energy interdependence could make Europe more secure and help to liberalize Russia at the same time. In his response, Klaus Gretschmann of the EU Council expressed concern over Russia’s use of energy as a policy tool. He questioned whether Russia would remain a reliable supplier of energy, as it seems to be driven increasingly by geopolitical objectives. This does not mean, however, that Russia has the upper hand, given its dependence on Europe for revenue from natural gas. Now the two sides must forge a more balanced partnership, he said. Based on his country’s experience, Pekka Sutela, head of the Bank of Finland Institute for Economies in Transition, was more optimistic on Russia. He said he expected a gradual “Europeanization” of Russian businesses. Finally, former U.S. Ambassador to Germany John Kornblum recommended that Europe and Russia address energy issues in a strategic economic dialogue.
Andris Kesteris, head of office of the European Energy Commissioner, began the third panel by encouraging energy cooperation with Russia and calling for supply diversification. This does not always mean bringing pipelines from distant regions to Europe, he explained, citing as an example Commission proposals on renewable energy sources and energy efficiency. He also pointed to the latest energy market liberalization package, which features ownership unbundling. By separating transmission from power generation and gas supply activities, the Commission aims to increase competition and ensure fair prices. Then Fortum Chief Executive Mikael Lilius criticized policymakers and industry for putting off investments in energy assets and relying on imports to meet Europe’s needs. He welcomed the new proposals on unbundling, saying a larger, more competitive market would promote investment and add to overall energy security and market stability.
Concerns over climate change and Middle East terrorism have brought energy to the forefront of international politics, said Finnish Minister of the Environment Paula Lehtomäki in the last session of the day. It is in Europe’s interest to introduce energy efficiency technologies in emerging economies and to develop broad-based relations with autocratic oil states. She also said it was important to integrate Turkey into the European Union and its trading area as that country becomes an energy hub. Helga Schmid, advisor to the EU High Representative for the CFSP, said the European Commission and Council have made strides in integrating energy in foreign and security policies. She highlighted energy cooperation with Africa, but was less optimistic on Iran in light of the nuclear standoff and tensions in the wider region.
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The panel concluded with comments from Air Commodore (Retd) Jasjit Singh on the link between energy and terrorism — oil prices in the 1970s sparked a revival of Islam that turned violent in some places, according to him — and Afghanistan’s role as a transit point for Central Asian sources. Mr. Singh called for greater dialogue between the EU and India on energy, saying India could help stabilize West and Central Asia and protect supply routes there.
The final day began with a panel on Nordic and German policy approaches. Matti Vuoria, president and CEO of Varma Mutual Pension Insurance Co. and a former trade ministry official, reviewed EU progress on energy through the lens of Finnish experience, concluding little has been achieved since the mid-Nineties. Due to individual, national positions, EU free-market laws do not apply to energy supply and demand, as they do in other product and service markets. The results, he said, are higher prices and a threat to Europe’s competitiveness in the global economy. In his response, German Environment State Secretary Matthias Machnig said Europe should restructure energy and industrial production in order to reduce dependency on imported fuels and meet emission targets. He called for an integrated approach to energy and climate change that would boost investment in energy efficiency and renewable energy technologies.
The conference concluded with a summary of participants’ recommendations for a common European energy policy. Mr. Machnig again said technological innovation would be key to securing supplies, lowering prices and combating climate change. He encouraged cooperation with Europe’s partners, especially the United States, in bringing new technologies to market. Ambassador Kornblum suggested energy would be the defining issue of Europe’s future. He said Europe had to transcend its post-war design — slow moving, egalitarian, highly regulated — in order to realize the strategic vision needed to secure its energy future. The editor-in-chief of Russia in Global Affairs, Fyodor Lukyanov, recommended pursuing a pragmatic approach to relations with Russia instead of emphasizing mutual dependence and shared interests. Finally, Peter Lund, professor in advanced energy systems at the Helsinki University of Technology, said EU–Russian relations were not in crisis, but rather laden with misunderstandings as both sides use energy to distract from domestic problems. To prevent the further politicization of energy, he called for a common energy policy with Russia that would increase dialogue, trade and exchange of European know-how for Russian gas imports.
Conclusions
- Energy will define Europe’s future and require greater strategic thinking
- European energy policy has long been inward-looking and dominated by competing national interests
- Any common policy should integrate energy and climate change and promote investment in energy efficiency and renewable energy technologies — Europe can lead the way
- The EU should approach relations with Russia pragmatically and increase dialogue, trade and exchange of know-how for energy imports
- Cooperation with the United States and neighboring countries is important in tackling global energy and climate change concerns
More Information
Conference Folder
[PDF / 1,65 MB]
Conference Report
[PDF / 4,48 MB]
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