Published by: iea.org | 2014
1. EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS
Since the first International Energy Agency (IEA) in-depth review in 2008 of the energy policy of the European Union (EU), the European Union has taken significant steps towards reaching its energy and climate objectives for 2020 and integrating the fragmented electricity and natural gas markets into a single energy market. As the current report shows, progress is evident in many areas of EU energy policy since 2008, but challenges also abound.
Energy policy in the European Union aims to address the three objectives of economic competitiveness, security of supply and environmental sustainability. In 2008, sustainability – notably, mitigating climate change – was the key driver for EU energy policies. However, the context for EU energy policy has changed dramatically. Today, concerns of energy security and industrial competitiveness have become more pressing.
Domestically, the European Union has been suffering from a major economic and financial crisis, which led to a reduction in energy demand. Indigenous oil and gas production and refining capacity have been declining even faster than the fall in EU demand. Imports continue to rise with implications for energy security. The outlook for unconventional gas and oil exploration in the European Union remains uncertain.
During 2008 to 2013, the European Union has been directly feeling the impact of global energy developments: the vast increase in energy demand in emerging economies; the
turmoil in North Africa, Middle East and Ukraine, threatening oil and gas production or supplies; the surge of unconventional oil and gas production in North America; ample and low-cost international coal supplies; and the nuclear accident in Fukushima Daiichi, bringing back concerns about the use of nuclear power, while at the same time, leading to increased pressure on the global liquefied natural gas (LNG) supplies.
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