BFBEnergyPaper

Despite these problems, the EU’s current policy agenda seems to be ‘more of the same’.Current proposals from the European Commission focus on completing the Single Market,with specific proposals for more regulation and harmonisation with a view to improveinterconnectivity. It should also be remembered that, while important, interconnection onits own does not guarantee that prices will fall; as President Barroso admitted in a recentpresentation when looking at the impact of EU proposals, “energy costs [are] to rise in allscenarios”. 153 The recent 2030 framework for climate and energy policies unfortunatelyfailed to address the EU’s failings, instead introducing a new renewables target of 27 percent (though as of yet there hasn’t been new binding targets on member states) and onlyoffered a review of the energy efficiency directive, looking at “policy measures at the EU andnational levels”. 154The problem with EU regulation in recent years is that it has been based on a number ofassumptions, assumptions which, in the words of the House of Lords, “have been proveninaccurate”. 155 In particular the EU’s belief in the mid-2000s that there would be a global dealagreed at Copenhagen (in which the EU would play a major role) to tackle climate changenever materialised. At the same time the period 2005-14 has seen major changes in theglobal markets: economic recession has brought the price of carbon down while the shift toshale gas in the US has, at least in the short to medium term, revolutionised and revitalisedfossil fuel industries that had previously been seen as endangered. EU policy decided in themid-2000s is already well out of date, yet it is very hard for the UK to opt out of or modifythese laws.In many respects the global shift towards green technology and the decreasing costs ofclean energy will encourage investment in green technology regardless of the decisionof policy makers. Across the world there has been a noted decline in the costs of cleanenergy. To take just one example, according to research from the financial firm Lazard Freres& Co. the levelised cost of electricity for wind and solar installations across the US has fallenby over 50 per cent in the past four years. 156 The falling costs of green technology meanthat, in many ways, market dynamics will encourage a more effective investment in greentechnology regardless of EU action.This final chapter demonstrates British business’ desire for a new deal and looks at theways renegotiation could change the current, unsatisfactory situation. Big changes canbe secured via both short term changes in the way EU works and longer term changeswhich would involve changing the EU’s Treaties. Such long term changes would allow forexisting laws to be reviewed and would clarify the limits of the EU’s power, giving memberstates greater safeguards to protect their energy policies and energy mixes from future EUregulation. Such long term changes would also give member states the chance to reassesstheir membership of EU programmes like the EU Emissions Trading Scheme, something thatgroups such as Open Europe have long advocated.153 European Commission, Energy Priorities for Europe: Presentation of J.M. Barroso to the European Council, 22 May 2013, found at154 European Commission Climate Action, information found at 155 Lords European Union Sub Committee, No country is an energy island, p. 9, 2 May 2013, found at 156 Lazard, Levelized cost of Energy Analysis - Version 7.0, August 2013, found at 45