Since 2009, the European Union has been working towards a transformation in its energy policy, looking beyond the immediate future and aiming for long-term goals framed in a more sustainable energy market. As of today, 22% of the European Union’s domestic energy production comes from renewable resources. However, in the case of the Middle East and North Africa countries this figure decreases to 6%. It is impossible to design an efficient energy policy circumscribed by the borders of the European Union as cooperation is needed in terms of legislation and infrastructure with its neighbour regions in order to truly fulfil these long-term goals. Increasing pressures, economic interests and national concerns have been threatening this fragile balance, further highlighting the need to work together and share a common destiny.
The landmark 20th anniversary of the Barcelona Process in 2015 elicits some serious reflection on the outcomes of this political experiment. Of the many dimensions that make up this complex framework, energy policy integration between the two shores of the Mediterranean Sea may be one of the hardest to assess. Especially over the last fifteen years, the European Union (EU) has been consistent in defining its energy policy priorities: an efficient and integrated energy market, sustainable production aimed at reducing emissions, and improved reliance on clean and diversified sources in order to depend less and less on imports of polluting, depleting fossil fuels. The climate-energy strategy that now defines energy policy-making in Brussels is re-shaping all the dimensions of European intervention, both inside and outside the EU.
All partners interested in cooperation with the EU on these topics have to adapt to this new mindset. On the other hand, the full implementation of the EU’s grand strategy cannot be achieved unless the EU’s greater neighbourhood is actively involved in its construction, abiding by its legislation, fitting into its infrastructure and spreading its long-term vision. How does this merge with long-standing expectations of a stronger, deeper cooperation with the southern neighbourhood? How does this affect the EU’s normative power stance in the region? And what assets can the southern neighbourhood offer to the EU to make it a valuable partner in the new energy, climate and sustainability agenda? Let us first define the key tenets of the EU’s new comprehensive approach and then assess what steps have been taken in this direction within the framework of its cooperation with the Mediterranean’s southern shore.
A “European Way” of Making Energy Policy?
It was not until 2009 that energy policy appeared in the treaties as a full-fledged EU competence. Throughout the first five decades of European integration, EU Member States had been careful not to forgo any power on energy policy, a very sensitive component of a hard-core idea of national sovereignty. This institutional setting did not leave European institutions such as the European Commission much room for political manoeuvre. As a result, and given its legal and institutional constraints, the EU pursued a composite strategy made of marginal, tailored measures in key policy areas. The European Commission used the creation of the internal common market to channel more proactive and harmonised legislation on Europe-wide electricity and gas markets (the third and latest “energy package” that entered into force in 2009). Energy market norms also helped regulate the field of renewable energy production, with a keystone directive in 2001, updated and enhanced in 2009. Energy market legislation allowed the EU to bring in regulations and directives (as well as norms and values) on energy efficiency and energy emissions trade, with large repercussions on industrial, transport and environmental policies. Within an unfriendly institutional and legal framework, under the pressure of global markets and events, within a span of ten years the European Union has (at least partially) fulfilled the expectations of the policy vision it set out in the Commission’s (2006) communications on a “Sustainable, Competitive, and Secure Energy” and an “Energy Policy for Europe” (2007).
Over 60% of imported natural gas and oil came from either Russia or Norway, pointing to a dangerous dependency that has only grown worse over the last ten years
As of today, the European Union comes to the global stage of energy policy with 22% of its domestic energy produced from renewable sources; a complex pattern of energy market regulations that nourishes public service obligations and monitors third-party access in a liberalised market traditionally reserved to state-owned companies and utilities; large investments dedicated to the establishment of a Europe-wide energy infrastructure to boost efficiency and provide source diversification; and a growing environment of agencies and bodies to regulate this field at a fully supranational level. All this notwithstanding, in 2012 the EU’s 28 Member States were importing 53.4% of their consumed energy. They relied on just one major exporter – Russia – for 34% of their oil imports, 32% of gas imports, and 28% of solid fuel imports. Over 60% of imported natural gas and oil came from either Russia or Norway, pointing to a dangerous dependency that has only grown worse over the last ten years. Even though domestic production of clean energy has steadily increased, coal imports have more than doubled since 1995. Finally, the recent escalation of political tensions between Russia and Ukraine (a transit country of key EU supply infrastructure and deals) has jeopardised stability on the eastern energy front while upsetting potential diversification plans. In other words, while the EU has been progressing – perhaps in an unprecedented way in the history of EU integration – on the way to energy policy integration and convergence, increasing pressures, economic interests, and national concerns have been threatening this fragile balance. The Southern Mediterranean has always been a geopolitical and strategic option for EU energy interests, but to what extent is it compatible with these developments and the latest turn of events in the region?
Euro-Mediterranean Integration and Energy Policy
Energy cooperation between the EU and its Mediterranean neighbours has been central in their mutual relations. Since the 1995 Barcelona Declaration, the framework has evolved first into the Euro-Mediterranean Partnership, based on bilateral national Action Plans between the EU and its southern neighbours, and since 2004 into the wider European Neighbourhood Policy (ENP), an ambitious comprehensive strategy that addressed the eastern and southern borders of the EU together. The ENP’s distinctive feature is the establishment of a multi-lateral, more regional approach – even though this choice has (appropriately) attracted criticism over its unnecessary one-size-fits-all nature in a scheme that attempts to deal with extremely different problems and challenges in extremely different countries by proposing one large homogeneous response. Energy policy has always been part of this cooperation pattern, even though perhaps without the necessary visibility or room for actual dialogue and exchange.
Even under the ENP scheme, below the overarching multilateral frame, the cooperation mechanism has been quite simple. The EU and its partners bilaterally agree on national Action Plans that set out all the necessary measures to enhance cooperation and achieve the partnership’s objectives. Energy policy has been part of this design since the inception of the scheme and the recognition of its crucial importance for national governments and the EU alike. All national Action Plans mention the effort to “step up energy cooperation with a view to gradual convergence… towards the objectives of EU energy policy,” with references to “gradual future integration of Maghreb energy markets into the EU internal energy market,” the construction of electricity and gas markets in the region, and a “view to convergence towards the principles of the EU internal electricity and gas markets.” Markets are not the only priority singled out in the Plans: emphasis is also put on “enhancing energy efficiency and the use of renewable energy as well as cooperation in the oil and gas industry.” The wording of the national Action Plans, therefore, opens all channels for EU-Mediterranean cooperation to address all three key dimensions of energy policy-making in a structured dialogue between the partners. The documents, in other words, seem apt to promote the image of a constructive dialogue between a normative actorlike the EU, ready to export its best practices and vision for a sustainable future, and good-willed Mediterranean neighbours ready to build on past positive examples in order to achieve unprecedented objectives and act as first movers in the region. To what extent, however, has this really been put into practice?
Both the EU and its southern neighbours have seen a huge potential in renewable energy production, especially because of the geography of the region: constant direct exposure to sunlight; immense territories with almost non-existent urbanisation that made an obvious argument for impact-less infrastructure
When it comes to the definition and implementation of a sustainability agenda, energy from renewable sources is one powerful indicator – since it is one measurement that has implications on infrastructure building, energy consumption habits, decreasing dependence on fossil sources, and empowering domestic production versus imports. In this regard, the situation on the Southern Mediterranean shore is not blissful. Both the EU and its southern neighbours have seen a huge potential in renewable energy production, especially because of the geography of the region: constant direct exposure to sunlight; immense territories with almost non-existent urbanisation that made an obvious argument for impact-less infrastructure; and a contiguous geography that could assure interconnection throughout a grand “grid” spreading across the north of Africa. The potential of this region was especially promising because it could make up not only for the energy needs of the Southern Mediterranean countries, but also for those of their European partners, eagerly looking for an alternative to fossil fuel imports.
On a yearly basis, Mediterranean countries consume just a portion of European rates. According to 2012 data from the United States’ Energy Information Administration, the Southern Mediterranean ENP partners combined consume just 44.9% of total consumption in the EU. All Middle Eastern and Northern African countries involved in the partnership combined consume less energy than France or Germany alone. Consumption is on the rise in these countries due to slow but constant economic growth (about 14% more demand in the last 5 years), but the potential enshrined in a full-fledged renewables industry has always seemed to outweigh the costs. At the same time, data for 2012 from the League of Arab States – a regional institution that has often voiced its strong interest in developing a sustainable course of action for energy policy in this area – shows that 94% of all energy consumed by its member countries come from depleting fossil fuels, while only 6% comes from renewable sources (5% from hydropower alone in water-rich Nile and Euphrates areas). It is no wonder that actual projects in the area within the framework of Euro-Mediterranean cooperation have revolved around two key tools: renewables and infrastructure. However, it has not been as easy as it looks on paper.
A significant boost to cooperation in this field was provided from outside the Euro-Med scheme. The environment- and climate-sensitive think tank Club of Rome was the institutional platform upon which a consortium of private investors agreed, since 2003, behind the German company Dii (Desertec industrial initiative) to financially and technically back up the Desertec project – an ambitious plan to establish an interconnected grid of renewable energy facilities across North Africa, with direct connections to Europe’s grid. The Desertec rationale responded to present day challenges such as fossil fuel and import dependence with the use of at least a portion of the huge natural potential of the territories involved. The consortium included a number of European and Northern African and Middle Eastern partners, as well as members from outside the Euro-Med region. Costs exceeding the forecast budget of 400 billion euros, political instability in the area, and the very ambitiousness of the project, however, have slowed down its initial momentum and, as of today, most original stakeholders have withdrawn support for the implementation of the project.
The issue at stake in energy policy cooperation between the European Union and its Mediterranean partners is the ability of the EU to build on the expertise, advances and results of its climate-energy strategy and project it beyond its own borders
Private investment and entrepreneurship was also key to another project promoted by the European industry with the aim of creating a functioning, efficient interconnected grid throughout the Euro-Mediterranean region as a whole –MedGrid. In this regard, Desertec would be just one portion of the huge interconnection map designed by the MedGrid project, which planned the smart interconnection of the entire European and Mediterranean infrastructure, in order to better respond to crises, avoid bottlenecks, and reduce waste to a minimum. A memorandum of understanding was signed between the two financial enterprises to combine efforts for the creation of a pan-European and pan-Mediterranean “super smart grid”.
National governments, also in the EU, are subject to electoral pressure and cycles and are inevitably attracted by short-term solutions addressing sensitive energy security issues as they compete for power domestically
The circle closes as both initiatives have now been adopted and integrated – in spite of their not entirely optimistic outlook – within an institutional framework in the European Union’s larger system. In 2008, under the guidance of the French Presidency of the European Council, the EU established the Union for the Mediterranean (UfM), an attempt to revive the ENP objectives with tailored regional initiatives, in parallel with the creation of the Eastern Partnership on the eastern side of the neighbourhood. Revamping the spirit of the Barcelona Process, the UfM rests on a firm institutional structure and aims to establish a close space of political cooperation on economic, cultural, political, and judicial dialogue. Energy policy has been part of the UfM’s agenda, especially through the definition of (and political investment in) the Mediterranean Solar Plan(MSP), a long-term project which builds on the scientific and technological advances of Desertec and MedGrid while also providing new political commitment to shared energy governance in the area. Launched in 2008, the MSP adds to the existing policy platform by attempting to address the “climate-energy problem at the interregional level,” with joint ownership of decisions and strategy between the EU and non-EU partners. The MSP also promotes “another ’20-objective’ to the ground” (Carafa, 2011:7) with an additional 20-gigawatt capacity to be installed in the region. With its commitment to the agenda of the Euro-Mediterranean dialogue, the UfM has been offering fresher prospects for an enhanced sustainability discourse to spread across the region. There are several challenges and opportunities, though, which are worth considering when looking at the near future.
Conclusions: What Prospects for the Euro-Med Energy Dialogue?
The analysis above shows that the issue at stake in energy policy cooperation between the European Union and its Mediterranean partners is the ability of the EU to build on the expertise, advances and results of its climate-energy strategy and project it beyond its own borders to include its southern neighbours in a shared platform, infrastructure, and long-term plan. While the EU tentatively progresses on its way to the “20-20-20 goals” in energy efficiency, renewable energy production, and emissions cuts, it has been extremely hard to give this project an effective momentum because of certain structural shortcomings:
- The institutional environment is still evolving.The Union for the Mediterranean, active since 2008 and putting forth a consistent investment strategy and cooperation framework on energy policy, is still relatively so young that it is hard to assess its ability to defend a Mediterranean energy-climate agenda. Its Mediterranean Solar Plan (MSP) is an ambitious project that has the merit of considering the interregional response as the only viable one. Yet, the focus on private investment and the blurred line between European financial investment and shared energy returns make the balance vulnerable to political bargain. The goal of an interconnected trans-Mediterranean smart network can have an unprecedented impact on how energy is made and consumed in one of the most economically-intensive and largely-populated areas of the world. Its technical features, however, put worrying emphasis on the importance of the market when defining the energy cooperation agenda, marginalising other crucial issues such as sustainable consumption and climate-change action;
- The political debate is unpredictable. The events of the last few years have cast a shadow of unpredictability over the whole Mediterranean region that hinders dialogue and provokes market mistrust. On the European side, the financial crisis has weakened the interest in capital-intensive investment. On the southern side, the “Arab Spring” uprisings marked a transition toward domestic turmoil, unstable governments, and an unclear role for religious actors in newly-established regimes. This translates into an even less secure investment environment that has scared away significant interests from European and global economic groups. The gigantic infrastructure designed within the MSP framework may be untenable under current conditions. The markets have favoured short-term certainty and guarantees of fossil fuels and hydrocarbons – an established industry that has been using price fluctuations to regain leverage, while slowing significantly down the momentum of the sustainability narrative and the interest in a “greener” economy. National governments, also in the EU, are subject to electoral pressure and cycles and are inevitably attracted by short-term solutions addressing such sensitive energy security issues as they compete for power domestically;
- There are positive lessons to be learned, but they will need more political courage. In spite of all the difficulties and the impoverished resources available, energy cooperation between the EU and its neighbourhood has taught the Mediterranean some interesting and optimistic lessons. On the eastern front, shared infrastructure planning has paved the way to successful implementation of many projects within the EU-funded INOGATE framework, expanding the natural gas and electricity network eastwards into the Central Asian republics. In the Western Balkans, the Energy Community for South-East Europe now enters the eighth year of activity, with significant results in legal harmonisation of a common energy market and enhanced regulatory cooperation among national authorities. In the Mediterranean, the MedRegassociation of national regulators is following this latter example, showing that actual collaboration within an equitable institutional setting is possible and welcomed by both sides of the Mediterranean. These examples allow analysts to think that a more consistent collaboration scheme is possible. In the wake of the establishment of this EU-led sustainability paradigm, former Commission president Jacques Delors invited a serious reflection on a common energy policy across the EU and its greater neighbourhood as early as 2010 (Andoura et al., 2010). Shortly after its appointment in late 2014, Commission president Jean-Claude Juncker released a programme for his administration’s agenda that emphasised the need for an institutionalised Energy Union to encompass the EU and its neighbourhood and address the inevitable challenges of energy security, efficiency, and climate-change action that lie ahead in the near future of the whole region.
The 20th anniversary of the Barcelona Process is an important threshold to look back and resolutely assess what the cooperation between the two shores of the Mediterranean has been able to achieve. At the same time, however, when it comes to energy policy and its priorities, it also rewinds a ticking clock that urges the EU and its neighbours to act immediately to tackle the common challenges of the next few years, and find stable common ground for sustainable development, efficient markets, and responsible growth within a greater, equitable partnership.
 The European Council of March 2007 established a formal political consensus on these objectives by officially setting out the so-called “20-20-20 goals” for the year 2020: a reduction by 20% of carbon dioxide emissions, a reduction by 20% of overall energy consumption, and reaching a quota of at least 20% of renewable energy consumption in the EU.
 From the EU-Tunisia Action Plan.
 From the EU-Egypt Action Plan.
 In 2012, for instance, Egypt produced a total of about 3.38 gigawatts of energy from renewable sources, while Germany (with basically the same population in one-third of the size) had an installed capacity of over 177 gigawatts. The comparison is even more striking taking into account that Germany produced 32.6 gigawatts from photovoltaic solar power, while Egypt’s figures – in spite of an enormously higher solar exposure – lag at around 0.015 gigawatts.