Online archive - find the most current content at

EU energy challenges

How great is the EU region's vulnerability to rising energy prices and what is needed in terms of policy recommendations to cope with this challenge? Finding answers to these questions formed the core tasks of the ESPON ReRisk (Regions at Risk of Energy Poverty) project. This article focuses on the relationship between energy and regional development, the role of governance in energy development and the threats, opportunities and likely impacts of different policies. Measures designed to cope with rising energy prices and climate change mitigation are also discussed.

The availability of renewable as well as non-renewable energy resources is uneven. Therefore, regions lacking energy resources are generally exposed to shifts in energy supply. Energy-rich regions on the other hand are exporters, depending on demand but perhaps more on the availability of technological and institutional solutions for its exploitation, transformation and transmission.

The consumption of energy is first and foremost related to the type and scale of industries as well as the characteristics of settlement structures in the regions concerned. Heavy industries are usually located in rural or peripheral areas with easy access to primary energy resources. Households and services on the contrary are often concentrated in large urban areas usually well away from the main sources of energy. This implies that most of the energy consumed needs to be transmitted over long distances.

A wider distribution of living and working areas, as well as larger commuting distances, increases the need for energy transportation. Both sparsely populated regions and urban areas with high degrees of sprawl tend to show high energy spending per capita. In addition, high temperature fluctuations between seasons also play an important role in energy demand.

Knowledge transfer

Technology acts both as an asset and as a driver in energy and regional development. In Navarra (Spain) the import and deployment of wind energy turbines from Denmark during the 1990s led not only to the generation of wind energy, but equally importantly to the creation of a strong local wind turbine manufacturing industry which today is a global leader in this field.

Thus, new technologies make the utilisation of energy resources possible but also have the potential to bring in new knowledge, to stimulate business and to help generate new opportunities.

Reducing costs

The efficient transfer and adoption of technology is possible only if the right circumstances for innovation capacity and good governance are put in place. The four case studies in the ReRisk project show that the adaptive capacity of regions is chiefly dependant on innovation. As in any other sector, the development of new technologies for energy is the result of the accumulation of knowledge and experiences as well as the creativity of institutions and the population in general.

Communication has also proven vital in the sense that it facilitates knowledge exchange. In the case of Kalundborg for instance the communication of joint business interests and high innovation capacity materialised in an industrial symbiosis (IS) complex reducing production costs for the companies involved along with reductions in energy and water consumption as well as waste generation.

Consumer awareness on costs and the possible environmental impacts of energy spending is decisive in terms of the ways in which energy resources are consumed. One such example is Freiburg in Germany where environmental awareness has promoted 'green energy' rather than coal or nuclear power, something which has now materialised in an internationally recognised model on green housing.

National and regional policies

How resources are made available for consumers and who benefits from their exploitation and commercialisation is basically determined by the prevailing governance structures and policies. For instance, in highly centralised national governments the majority of the gains from natural resource exploitation are usually allocated to capital regions while decentralised regimes tend to see benefits go to the regions from which the resources were obtained.

Results from the ReRisk project show that while energy policy in Europe is generally concentrated at the national level, important differences exist between the national and regional levels regarding the character of emphasis on energy policy.

A general overview of the 41 regional agencies included in the ReRisk survey reveals that national authorities tend to have a stronger strategic focus on the issue of supply security. Regional and local levels tend, on the other hand, to emphasise energy efficiency and environmental protection, especially in connection with the exploitation of renewable energy resources. The survey also confirms that regional specificities better explain how regions respond to local energy challenges.

Fostering cross-sector awareness on energy consumption is an area in which national governments are strong, while local and regional governments often have a stronger position on governing domestic energy activities concerning households and the built environment.

The local emphasis on energy efficiency is regarded as dependant on the behaviour of consumers and solutions provided by the built environment. While knowledge on the cultural context of regions is essential for promoting the need for energy consumption reductions by individuals, the built environment is often given by the spatial context of the region, for instance building techniques, materials available and climate.

EU agreements needed

The path followed by the Europe Union has been to decrease dependency on fossil fuels by increasing the share and volume of 'renewables' while also increasing energy efficiency within the context of achieving economic growth. Several questions however emerge from this energy paradigm each of which are addressed in turn in the context of the ReRisk scenarios. These questions include, among others; how new energy systems could be governed, what threats and opportunities may emerge for regional economies and how quality of life may be affected.

It is clear that the creation of a common European energy policy framework is indispensable for regional and energy development. National and transnational actors must agree upon and forward measures that foster the desirable development of mitigating climate change while securing the energy supply. The scenarios also suggest that regional and local approaches that recognise regional specificities are necessary. High energy prices will undeniably impact regional competitiveness and cohesion in the future though the degree and the character of the impacts will vary depending on the region's individual characteristics.

'Renewables' suggest local approach

The integration of renewable energy in the European energy mix may suggest the need for a more localised approach in the energy sector. Renewable energy is characterised by being diffused across the regions, compared to fossil energy sources where resources are usually highly concentrated, and the level of investment for their exploitation stretches from small solar and wind energy devices for houses to large offshore wind parks and thermo-solar parks.

This more decentralised character of renewables certainly demands that new institutional settings be put in place which can be better adapted to local needs. Both 'top-down' and 'bottom-up' approaches are therefore necessary for ensuring a sustainable energy sector while also ensuring that the regions involved find opportunities for development and benefit from the generation of renewable energy.

Urban must modernise

The goal of energy efficiency is as important for regional development and cohesion as the diversification of the energy supply. Industries should modernise their production processes putting in place efficient machinery and technology in order to be competitive in both local and international markets. Nevertheless, the further development of the knowledge and service sector implies that urban regions in Europe will continue to grow and with them the demand for energy will grow also. Therefore urban infrastructures need to be modernised both by means of the retrofitting of buildings and the deployment of efficient and comfortable public transport solutions.

A shift in consumer habits towards the rational use of resources is also necessary. This implies, among other things, increases in the recycling of waste as well as reductions in packaging and the disposal of commercialised products. Information campaigns will play an important role here in providing quality of life, by promoting simple behaviour changes in consumers and increasing awareness of affordable energy efficient technologies in illumination, appliances and other home devices.

Urban growth may also suggest that the transmission of energy over large distances will become ever more important, not only due to demographic and economic concentration, but also because major potentials in respect of renewable energy are often located in remote areas.

Transport needs a new global consensus

Challenges in all scenarios are most evident in the transport sector. Today's transport systems, not only in Europe but worldwide, are deeply rooted in fossil fuel use. Therefore, change requires a shift towards new systems which demand global political consensus, enormous investments and new technologies. As an example of this, the availability of suitable energy for vehicles is still far from being solved due to the complexity and resource demand in solutions such as batteries and fuel cells.

Measures such as bringing production closer to markets and the optimisation in logistics could be regarded as part of the future solution for the transport sector but nevertheless a spatial shift in these economies is still likely to be required. Increasing transport cost could, for instance, lead tourism to move closer to urban areas, resulting in negative economic impacts in remote tourist regions such as the islands in the Mediterranean Sea.

Patrick Galera Lindblom

Research Fellow