EU calls for new low-carbon power revolution as it seeks to cut oil imports

In a draft paper seen by the Associated Press, the European Commission says the days of secure, cheap energy for Europe are over.

Surging world demand for limited stocks of oil and gas has sent prices fluctuating. The EU executive said Europe has to look at alternatives: using more renewable energy such as wind power and biofuels.

It also suggests that current plans to cut back nuclear power — which it calls "one of the cheapest sources of low carbon energy" — will endanger the goal of curbing greenhouse gas emissions. It does not, however, explicitly endorse nuclear, saying this is a decision for each EU nation.

Electricity generation will be "heavily dependent" on natural gas, it said, warning a number of countries reliant on one main supplier that they should diversify.

The EU said it is confident that relationships with oil and gas suppliers Norway, Russia and Algeria will strengthen in future but said it still needs to open up a range of sources, suppliers, transport routes and methods.

However, European concerns about the reliability of Russian supplies were underscored Monday when shipments of Russian oil via a pipline running through Belarus were disrupted by a trade dispute between the two former Soviet republics.

In an effort to diversify supply, the EU plans to start negotiations with Turkmenistan and Uzbekistan, build on agreements with Azerbaijan and Kazakhstan and cement relations with Turkey, Egypt and other nations, including Libya "if possible," it said.

It will also explore bilateral pacts with the Gulf state of Qatar and energy exporting nations in the Caribbean and Latin America, it said.

The world also needs a global effort to cut energy use, it suggests, proposing an energy efficiency agreement for industrialized nations plus China, India and Brazil to be signed at the Beijing Olympics in July 2008.

Supply uncertainties mean the EU has to rely on power in its own backyard, boosting renewables and making clean coal technology a reality.

Europe insists that investing in cleaner technologies will provide new jobs, saying it is already committed to sharing clean coal technology with power-hungry China, which built some 50 coal power plants last year.

The EU executive suggests setting a new target — no figure appears in the draft — for renewable power by 2020, with a binding target for biofuels to replace oil in vehicles. It says that biofuels could take up 14 percent of that market by 2020.

"Major investment" in renewable energy is needed to create the economies of scale that would make it viable, it said, acknowledging that many EU nations will fail to make existing goals to draw 12 percent of all EU energy from renewables by 2010.

Vast amounts of money also need to be pumped into Europe's electricity network with some ?900 billion needed just to provide more power generation alone in the next 25 years as demand grows.

The EU highlights other much-needed investments to link up European nations and make the network function better, highlighting the Caspian natural gas pipeline and links out to northern European offshore windfarms.

It recognizes serious problems with the way the electricity and gas markets work at the moment, highlighting the control huge energy companies have over energy production and sales. These issues that will be detailed in a parallel report from EU antitrust regulators on Wednesday.

It said these market problems are causing governments to cap power prices, leading to less investment in the sector that could cause future supply crunches. "This situation cannot continue," it warns, saying it believes a series of measures need to be taken to create a competitive market within three years.

It suggests two options to solve these monopoly-type problems: splitting up the companies that control the energy network from the supply and generation business; or allowing the company own the network and receive a return but turning over day-to-day control of the network to an independent system operator. The Associated Press

/The International Herald Tribune/