“Energy Policies of IEA Countries – 2004 Review” Special Edition Review of the last 30 years – Cross-Country-Overview

(Paris) — 2 December 2004

To mark its 30th birthday, the IEA launched today in Paris a Special Edition of “Energy Policies of IEA Countries – 2004 Review”. “IEA and its Member Countries are currently facing much more complicated energy policy challenges than in 1974”, said Claude Mandil, Executive Director of the IEA. The Agency was founded as a reaction to the first oil-crisis. 26 Member Countries are cooperating in order to achieve energy security, economic growth and environmental protection. “Despite considerable progress in pursuing our shared goals, there is still room for improvement. This includes better public awareness of energy policies and more cost-effectiveness in climate change mitigation. Governments have to implement strong and coherent energy policies”, said Mandil.

For the first time, this review gives a detailed account of how the energy markets and policies have evolved during the last three decades. Since 1974 the mission of IEA has expanded from oil supply security to broader energy security, including other forms of energy such as natural gas and electricity. Economic efficiency in the energy sector and environmental protection became new objectives.

IEA analyses regularly energy policies in each Member State. The Country Reviews contain criticism and recommendations. In this Special Edition the IEA presents for the first time a Cross-Country-Overview, covering all 26 Member States, a reference for future reviews and policymaking of Member Countries.

Among these challenges is the need for growing public awareness of energy policies. This is particularly valid for climate change issues, as the public is partly responsible for the rapid increase in Greenhouse Gas (GHG) emissions. The NIMBY (not in my backyard) phenomenon for energy- related investments has to be overcome. Another common challenge is better cost effectiveness in dealing with GHG emissions. In most of the IEA Member Countries, that does not yet form an integral part of the decision-making-process. For example, some policies promoting renewable energies are instrumental but too costly.

All energy markets are subject to liberalisation. However, this does not lead automatically to more effective competition. For example, the strong market control of incumbents is a big obstacle in many countries. Possible solutions include more regional integration of energy markets, strong and independent energy regulators, effective unbundling and non-discriminatory access to facilities.

National governments are no longer managing the energy sectors. Their role in liberalised gas and electricity markets is to define frameworks for the market players to ensure reliable supplies and application of the rules. In the coming decades, governments also have to monitor investment needs and create market incentives, if necessary. However, state intervention should remain at a minimum.

The 2004 Review contains notable developments in major non-member countries such as China, Russia, India, South East Asia, Latin America and the Middle East. Summaries of the most recent Country Reviews include Canada, Finland, France, the Netherlands, Portugal and Sweden. Shorter standard reviews cover seven other Member Countries: Austria, Denmark, Germany, Greece, Korea, the United Kingdom and the United States.

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