IEA Examines Efforts to Ensure a Secure, Sustainable and Affordable Energy Supply
(Paris) — 18 December 2003
The International Energy Agency (IEA) today published Energy Policies of IEA Countries – 2003 Review, which focuses on recent developments in the energy market and in energy policies. It also contains summaries of reviews of Austria, Hungary, Ireland, Italy, Japan and Switzerland conducted between October 2002 and June 2003. Reviewing the energy policies of Member countries is a central activity of the IEA and each Member country is reviewed in depth every four years. Shorter standard reviews are also included, covering seven other Member countries: Australia, Belgium, the Czech Republic, New Zealand, Norway, Spain and Turkey.
Energy Policies of IEA Countries – 2003 Review features an overview of major trends in the energy markets, notably the renewed interest in energy security on the part of policy-makers confronted by imminent concerns in the oil market. It describes an unusually tight oil market in the period leading to the outbreak of hostilities in Iraq, with historically low oil stocks, a strike in Venezuela which led to a dramatic shortfall in exports, unrest in Nigeria, unusually cold weather in the northern hemisphere and increased exports of oil to Japan due to the temporary outage of 17 nuclear units.
The study describes how, during the period before and during the war in Iraq, the IEA successfully worked to secure oil supply, in conjunction with Member countries, the oil industry, major oil-producing countries and OPEC, and ensured that there were no supply disruptions or price spikes. The exercise showed the effectiveness of the IEA’s emergency preparations.
2003 was also a year when growing gas demand and rising import dependency in most IEA Member countries obliged energy policy makers to look at the longer term issue of security of gas supply. In addition to these external developments, an internal dimension of energy security arose in the context of electricity and gas market reform. The blackouts in the United States and Canada in August 2003 and the following month in Italy raised concerns about the adequacy of investment in the reliability of power networks. The heat wave in northern Europe in the same month tested system limits. The study emphasises the need for governments to monitor the performance of gas and electricity markets, for the energy markets to deliver efficient price signals and for regulatory arrangements to allow an efficient response to investment needs.
Energy Policies of IEA Countries - 2003 Review describes the efforts by countries that have ratified the Kyoto Protocol to implement the agreements by various policies such as fiscal measures, regulatory instruments, voluntary agreements, tradable permits and RD&D despite the uncertain position of Russia, whose ratification is necessary if the Protocol is to enter into force.
Most IEA Member countries regard energy efficiency as one of the key policy tools to reduce greenhouse gas (GHG) emissions as well as achieve energy security. In 2003, IEA Member countries used methods such as the adjustment of energy prices, the establishment of financial instruments and mandating minimum efficiency levels, to promote energy efficiency.
The study describes trends in energy R&D policies of IEA Member countries and the initiatives launched by several Member countries in co-operation with the IEA to encourage energy technology R&D in fields such as C02 capture and storage, hydrogen and linkages between basic science and future energy technologies.
Energy Policies of IEA Countries – 2003 Review also describes developments in energy security and energy market reform in major non-OECD countries. It notes the progress made by China, India, South-East Asia, Latin America, Russia, Central and South-eastern Europe and Saudi Arabia.