Spring Council 1 | Nuclear power is back | Privatization fetish endangers energy security

In preparation for the Spring Council (that will take place March 24 - 26) we'll have a closer look at the current developments in the Lisbon Agenda (that's, basically, economy, jobs, education, energy ... so, everything).

Today, let's have a look at the Commission's green paper on energy ("A European Strategy for Sustainable, Competitive and Secure Energy"). You think that's boring? Well. It's not exactly party, but the paper gives a chill of another kind.

1. Why has energy become such a strategic cornerstone of Lisbon?

The more technical a topic gets, the less attention it receives from the mainstream media. Energy seems to fit this pattern pretty much. But this lack of attention is hazardous, pun intended. And here's why:

2. Nuclear Power is back

The turn is quiet but steady: nuclear power is back (do something, greens!) and we're not going to like it. Since the start of the Iraq war, the EU has given more attention to the European dependence on oil and gas from Russia and the Near East. This has lead, on the one hand, to a stronger focus on renewable energy (not much, though, although the Kyoto goals are already pretty much out of sight). On the other hand the Commission (and the Parliament) is pushing for nuclear energy again.

This reorientation is further supported by the nuclear industry's rising interest in participating in both the European growing need for energy and the world's rising demand for civil nuclear technology. It seems that the Greens do finally have a hot topic again ... if they decide to take it.

3. Privatization endangers security of energy supply

One of the results of privatization and rise of competition in the field of energy is that investments into infrastructure has shrunk sharply in the last years. Investment in infrastructure (eg. European north-south lines or peak-demand-plants) make sense only in long term, but are not supported by an immediate market need. That's an easy lesson, remember the brownouts in the US and Italy in 2004. The Commission, though, argues that lack of infrastructure prevents a fully competitive market.

Experience gained in countries that opened their energy markets for full competition (like Germany of Austria) shows that the market opening did not make competition and cheaper prices kick in. Quite the contrary: most providers merged to huge companies that now function as quasi-monopolies (public or private). The prices are way over the prices before the market opening.

Unlike many replacable consumer products, most utilities do not support market mechanism. After all, as there cannot be 5 different waterpipes there cannot be 5 power lines for every household. A "market" in power (as in water and gas) is artificial and can therefor only be sustained when all investments into infrastructure and security and stability are taken over by the public.

The "competitive energy market" that the Commission is pushing for in its green paper therefor means: less stability and security + higher prices by energy-monopolies + higher public costs for infrastructure.

It surprises in some way that the Commission still fetishizes the privatization of the energy market so much, although all facts suggest that this will endanger both the economy by higher prices and security of energy supply (not to mention the well-known risks of nuclear energy).