1. EnergieNed European energy policy
European energy policy
Introduction
2006 is the year of the European energy policy. The European Commission has presented a
green paper about the European energy policy, Commissioner Kroes is finishing her
investigation into the working of the market in the Electricity and Gas sectors and
Commissioner Piebalgs is increasing the pressure on the member states to implement the 2nd
Electricity and Gas Directives both by letter and in spirit in which they are intended. At the
end of 2006 the European Commission will make a definite judgement on the basis of these
documents as to whether additional measures are necessary to guarantee non-discriminatory
access to the networks, adequate availability of network capacity for competition, a fluid gas
and electricity market, transparency and effective regulation. This position paper discusses the
contribution that the Dutch energy sector can make to these discussions.
Principles
Ø The European energy policy is based on three main pillars - security of supply, sustainable
provision of energy and competitiviness. In order to promote development and support the
investment climate in the electricity and gas market in the long term it is necessary that
the European energy policy is predictable and that the various pillars are coherent with
each other.
Ø As the energy policy is a shared responsibility between Europe and the member states. The
European policy must focus on those points where actual added value can be provided
over and above national policies. Subsidiarity is and remains the main principle.
Ø European measures must be evaluated for their effectiveness beforehand. EnergieNed is
not in favour of measures that lead to an increase in European and Dutch bureaucracy and
an increase in the administrative burden for the sector. EnergieNed is, therefore, not in
favour of new annual European reports, for example about the security of supplies, or the
establishment of a new European Agency that will occupy itself with monitoring the supply
of energy.
Security of supply
Ø Security of supply requires diversification at three levels - relations with the producing
countries, routes for transport lines and energy sources. Therefore, energy policy must
form an important pillar of European and Dutch foreign policy.
Ø In its relations with the producing countries Europe must act as one block as the political
pioneer for import contracts and transport routes on behalf of the member countries. The
development of the internal market will be harmed when individual member states do this
bilaterally. EnergieNed is, therefore, also in favour of deepening the dialogue between the
EU and Russia and between the EU and OPEC. As well as this, EnergieNed advocates that
a similar dialogue should be started with the North African countries.
Ø With respect to diversification of energy sources it is stressed that the government must
not just focus on renewable sources of energy but must instead also make room for the
continued use of coal and gas. Fossil fuels, clean in the long term, and nuclear energy
cannot be separated from a transition to sustainable sources. What is at stake here is the
right balance between effectiveness, affordability, social costs and the return on
investments. This means that all options must be kept open and made possible. The choice
for the construction of new nuclear power stations remains a competence of the individual
member states.

2. EnergieNed European energy policy 2
Europe can play an important role in the creation of the safe and controlled storage of
nuclear waste, for example by designating various sites where European waste can be
stored.
Ø Europe must invest in a further stimulation of R&D programmes for the development of
energy saving measures, clean coal-fired technology, the optimization of gas-fired power
stations, nuclear energy, renewable energy sources and hydrogen.
Ø An internal European energy market also implies internal solidarity. This internal solidarity
expresses itself in the development of strategic gas and oil stocks, but also in supplying
energy to other EU countries under pre-agreed conditions in times of shortage. Possible
measures must not interfere with the working of the market, the investment climate and
the level paying field.
Ø It is important to create physical transport connections between the HUBs in order to
develop a fluid European gas market. The European policy must promote the construction
of these connections and broaden the possibilities for trade and allow these to develop. In
order to realise this, a suitable investment climate is required in combination with good
cooperation between the Transport and System Operators (TSOs) and the parties in the
market. The development of the “Gasrotonde” (Gas roundabout) is of importance for the
Netherlands. An important condition here is achieving good connections to the German and
Belgian transport networks and making solid agreements about transport.
The working of the market and the force of competition
Ø EnergieNed advocates that the Dutch and European authorities ensure that the 2nd
Electricity and Gas directive is implemented both by letter and in the spirit in which it is
intended in the various member states. This is necessary to achieve a level playing field in
Europe. At the moment the differences between the various member states are too large,
for example in the areas of competition and unbundling. The European Commission must
be able to intervene where the same rules do not apply in the EU countries and force the
European countries to implement the European regulations.
Ø The final aim of the liberalization of the electricity and gas market - an internal European
market - started in the nineties of the previous century is far from being achieved. The
coupling between neighbouring national markets has not, or not sufficiently, been realised.
It is therefore impossible to reform this patchwork into one market all at the same time.
EnergieNed therefore advocates a phased approach in which regional markets between
neighbouring countries in Europe are achieved first. EnergieNed has already taken the
initiative to establish a Northwest Europe market together with partners in Germany,
Belgium and France.
Ø In developing the Northwest Europe market EnergieNed aims for:
o the development of market places
o achieving regional market integration - including the creation of a good-functioning
Northwest Europe wholesale market
o further coordination and cooperation between the European Transport and System
Operators (TSOs) in order to promote market integration strongly
o the development and extension of financial products
o an increase in transparency, including increasing accessibility to existing information
o increasing the physical interconnection capacity where that is socially achievable
o encouraging the provision of connections between the Netherlands and the
international HUBs.
Sustainable provision of energy
Ø The Netherlands and Europe must move towards a sustainable provision of energy. There
are two important reasons for this. If international climate negotiations lead to meaningful
agreements about the reduction of CO2 for 2020, major steps will need to be taken in the
provision of energy. It is also clear that the EU is becoming increasingly more dependent on
the import of gas and oil so that the security of the energy supply is becoming
questionable.
Ø The transition must be made within the level playing field of a free European market for the
production and supply of energy. During the coming years significant investments will be

3. EnergieNed European energy policy 3
required in order to keep pace with the increased demand for energy and to replace
existing power stations. Each time the question will then arise as to what is technically
possible, affordable for the customers, economically viable for the investors and
responsible relative to the security of the energy supply. In the conditions of a free market
for energy investors will choose to spread their risks and not set all their cards on
renewable sources such as wind or biomass in the short term. Therefore, an important part
of our provisions will still make use of fossil fuels or nuclear power in the future. Fossil
fuels and nuclear energy, therefore, remain an inseparable part of a transition to
sustainable energy sources in Europe.
Ø The transition to a sustainable provision of energy encompasses far more than just an
improved environmental performance. This also means that there must be security of
supply, that the price remains affordable and companies must be able to achieve an
acceptable return on their investments. It is a strategy of different options, whereby the
right balance between all the ingredients is necessary. As well as efficient use this means
a sound mix of conventional sources, renewable energy and nuclear power.
Ø In order to make the desired energy transition a clear and stable policy is required in order
to generate the necessary investment climate. The success or otherwise of the energy
transition depends on this. Only then will companies be able to make choices with
confidence and essential innovations will be given their chance. In particular, clarity about
the aim for CO2 for after the Kyoto period must be given soon so that investment can be
geared to this.
Ø A sound investment climate means that all EU member states must have the same
regulations, instruments and aims, so that developments keep in step with the rest of
Europe. However the government stimulates the industry in the future, whether with
money or by means of regulations, it must be market-oriented, and there must be a
European market perspective and not one with national borders.
Ø For the present time renewable sources will remain more expensive than conventional
energy sources. Financial stimulation will therefore be needed, but a careful and market-
oriented approach is required. There must be a clear stimulus that will lead to an improved
price-performance ratio in the long term so that subsidies can eventually disappear entirely.
Stimulation must also take into account a level playing field in Europe.

4. EnergieNed European energy policy 4
Federation of Energy Companies in the Netherlands
Utrechtseweg 310
6812 AR Arnhem
P.O. Box 9042
6800 GD Arnhem
Telephone +3126 - 356 94 44
Fax +3126 - 446 01 46
E-mail ened@energiened.nl
Internet www.energiened.nl
For more information about this publication, please contact:
Rutger-Jan Hebben
Telephone: +3126 - 356 94 13
E-mail: rjhebben@energiened.nl
8 March 2006
The Federation of Energy Companies in the
Netherlands, EnergieNed, is the representative
body for all companies in the Netherlands
playing an active part in the production,
transport, trade or supply of gas, electricity or
heat. The Federation represents the interests
of its member companies. EnergieNed is the
point of contact for government bodies,
political parties and pressure groups
representing business, consumers and
environmentalists. On behalf of its members,
EnergieNed maintains a dialogue at national
and international levels with these
stakeholders.