1. The Green Paper on Energy Policy of the EU: 1/20 Conclusions
A Spanish vision
Introduction
This document contains the conclusions from a seminar which, with the
attendance of different representatives from national and community
administrations, national and foreign regulators, corporate associations, energy
companies and consumers and under the title Safety of Supply and Energy
Model, was held in Madrid on 16-17 May 2006.
The attendees - see annex 1 - freely expressed their opinions on the
global and European situation of different energy sectors and markets and their
contribution to subjects and challenges that the European Union Green Paper
"A European strategy for sustainable, competitive and safe energy" opened for
debate. This document basically covers the contents of the aforementioned
seminar and that is presented as a contribution from the Spanish Energy Club,
from a Spanish point of view, to the questions set out in the aforementioned
Green Paper.
Context
As will be recalled, the Green Paper meets the challenge that, both the
informal Council of Heads of State in Hampton Court, and subsequently the
European Council which brought the British Presidency to a close, made to the
European Commission for it to draw up a document on EU energy policy. The
growing energy dependence on EU and risk of depletion of supply were the
principal reasons for this initiative.
The European Commission formally approved this document in March of
20061
and it was subsequently presented at the Councils of Energy and Spring
European Council that also took place in March in Brussels. The European
Commission has opened a public consultation on this document. All interested
parties must send observations before 24 September 2006.

2. The Green Paper on Energy Policy of the EU: 2/21 Conclusions
A Spanish vision
General approach
The conference took place over two days with the participation of more
than 40 speakers from various companies, associations, public administrations,
regulators and energy institutions that successively dealt with the situation of
different energy sectors and markets, and the challenges and proposals
established in the Green Paper from the European Commission on energy policy
titled "A Strategy for Sustainable, Competitive and Safe Energy".
The observations or conclusions that are covered below constitute an
integral vision of the positions, which do not always coincide, of the different
speakers and participants in the conference on the matters set out in the
aforementioned Green Paper.
Unlike the previous Green Paper on the Safety of Supply that the
Commission published in 2000 and to whose debate the Spanish Energy Club
contributed, this Green Paper does not contain a specific questionnaire as
such2
, rather in its place, some areas of debate are indicated that the Green
Paper itself develops and on which it even presents proposals. These areas are
o Competitiveness and the domestic energy market
o Solidarity
o Diversification of the energy combination (mix)
o Fight against climate change
o Innovation and technology
o Foreign policy
1
There is also a support document that basically contains a general description of the EU energy sector
which touches upon the subsectors of oil, natural gas and electricity.
2
Subsequent to publication of the Green Paper, the European Commission has included a more specific
questionnaire on the Commission's web page: http://ec.europa.eu/energy/green-paper-
energy/index_en.htm

3. The Green Paper on Energy Policy of the EU: 3/21 Conclusions
A Spanish vision
Some observations are initially included that reflect general opinion
expressed in the seminar on the global content and circumstances of the Green
Paper. The principal ideas expressed in the conference are also reflected for
each one of the previous areas.
General observations on the energy policy Green Paper
Not one of the seminar speakers questioned the need or opportunity of
this new European Commission Green Paper. On the contrary, the need for the
EU to have a common energy policy was and the Commission Green Paper
being a good instrument to advance debate and design of this new policy was
unanimously assumed.
The following are included among the reasons expressed on the need for
this policy:
o The major current and future energy dependence in Europe. It is
necessary to strengthen the common policy to make it more
integral.
o The need for there to exist a long-term and therefore more stable
model of energy markets.
o The need to integrate policies that make up the different energy
sectors within one common energy policy.

4. The Green Paper on Energy Policy of the EU: 4/21 Conclusions
A Spanish vision
Another important observation expressed in the seminar is that a
distinction should be made between the safety of short term and long-term
supply. Whilst there are indices to measure the safety of short term supply,
there are none however for the corresponding long-term supply. Certain
measures are usually highlighted that contribute to increase this latter safety
such as for example the diversification of energy sources or geographical areas
or the construction of transport, regasification or storage facilities but there is
no measure to quantify this.
Competitiveness and the domestic energy market
The general opinion of speakers from different sectors (electricity, gas
and oil), is that open and transparent markets contribute positively to the safety
of supply as they give rise to correct signals for short-term production and
consumption and long-term investment.
Limiting ourselves now to the electricity and gas sectors on which the
aim of creating respective domestic electricity and gas markets in EU exists, a
series of common ideas were mentioned:
1- Whilst markets are not fully developed, the feeling gleaned from their
function is positive with consumers the principal beneficiaries.
2- Electricity and gas interconnection networks between different
countries and therefore interchanges are insufficient. Physical
integration of markets is still very limited.

5. The Green Paper on Energy Policy of the EU: 5/21 Conclusions
A Spanish vision
3- Over the next few years, it will be necessary to make major
investments on electricity and gas infrastructures that companies will
carry out if the context and profitability is adequate. Transparent and
foreseeable regulation will doubtless contribute to the investment of
companies.
The fundamental ideas on the domestic electricity market were, in
turn, the following:
1- The affirmation that there are 25 electrical markets isolated between
themselves is not shared. In Central-European countries there is
sufficient interconnection capacity that translates into very similar
wholesale market prices. The single market aim will be achieved by
partial integration of geographically close markets into regional markets.
2- The representative of a company manifested that, despite being more
efficient than European companies, the regulation of the sector in Spain
places them in an unfavourable position with respect to the rest of
European companies that generate more cash flow and have better stock
market behaviour. The representative therefore requested that this
regulatory asymmetry stop.
3- It was also mentioned that electricity is influenced by other types of
policies such as the diversification or promotion of different energy
sources. The mechanisms aimed at achieving these objectives should be
coherent with the efficient functioning of the energy market.

6. The Green Paper on Energy Policy of the EU: 6/21 Conclusions
A Spanish vision
4- In any case, the clearest message on the situation of the domestic
market in the case of Spain is the lack of interconnections.
The following observations and suggestions for the domestic gas
market were mentioned:
1- A specific problem of the domestic gas market is the growing
importation of gas that will arrive via gas pipeline or boats, the
insufficient interconnection between countries and also limited
infrastructures in the interior of each country.
2- The gas interconnections are developed either because they are really
profitable or because they signify greater safety of supply in some
countries. Only in this latter case will the support of public
administrations be necessary. In both cases, the existence of an
international transit model on an EU level would be desirable.
3- Fortunately in the gas sector, there are alternative sources of supply,
gas pipelines and LNG [Liquefied Natural Gas]. However, in the case of
LNG there are few possibilities of supply which makes their contracting
difficult and is usually translated into higher prices.

7. The Green Paper on Energy Policy of the EU: 7/21 Conclusions
A Spanish vision
Solidarity
The general opinion expressed at the conference is that effectively the
safety of supply in the EU may only be achieved with the participation of
everyone.
Both in the electrical and gas sector the fact that a greater capacity and
interconnection of networks helps solidarity, was highlighted. It was mentioned
that very possibly, if the MEDGAZ project had been functioning, including
connection of this gas pipeline via Spain with France, the problems that the
United Kingdom had last winter would have been avoided.
There is a perception in the gas sector that solidarity measures of the EU
with Spain will have little impact on Spain due to its geographical position, very
close to sources of supply by pipe, and well endowed with respect to LNG.
In the oil sector it was mentioned that the imposition of safety stocks are
somewhat artificial, represent major investments and in practice not so
probable that they will be used. It was recommended not to impose more
obligations in this sense. A representative from the sector questions at the
same time the proposal to publish the state-owned oil reserves contained in the
Green Paper. In the USA this policy led to speculation.
Diversification of the energy combination (Mix)
During the first session of the conference different speakers presented
the characteristics of each one of the energy sectors or sources and their
possible contribution to the challenges or aims of the Green Paper.
Diversification of the energy mixes is effectively a form of increasing the safety
of energy supply, thereby reducing the risks of high dependence.

8. The Green Paper on Energy Policy of the EU: 8/21 Conclusions
A Spanish vision
Given the major dependence of the EU in particular on gas and oil, the
common message from all speakers is that in Europe all energy sources are
necessary. The principal ideas expressed by representatives from different
sectors are indicated below:
Oil: both consumption and energy dependence will significantly increase
in the EU over the next years. The supply of oil is quite safe to date. Despite
complex financial disasters and increased demand, supply has been constant
with hardly any interruptions. However there have been significant variations in
prices. We cannot therefore speak of problems of supply but rather high prices
that may effectively endanger the economy and growth.
However there is uncertainty with respect to how demand will be dealt
with in the future and how high levels of consumption may affect climate
change. Among the proposals to deal with consumption, increasing investments
was mentioned, thereby eliminating protectionist barriers to trade in different
countries.
Coal: coal is an autochthonous, economic and safe source of energy and
furthermore does not present problems of transport and storage. Coal is very
abundant and reserves are very well distributed geographically. Latterly
progress both on the efficiency of production reactors and the reduction of
contaminated missions and dust and suspension have occurred. CO2 emission
capture and sequester technologies will lead to this energy source contributing
to energy supply not only competitively and safely but also in a sustainable
manner. Representatives from the sector also requested an initiative to
modernise the whole producing reactors park in Spain (there are 36 reactors).

9. The Green Paper on Energy Policy of the EU: 9/21 Conclusions
A Spanish vision
Natural gas: There has been a major increase in consumption of this fuel
in particular as primary energy for the production of electricity which is
translated into significant price increases. Technology and increasing prices has
made the use of methaners possible. Geographical diversification is more
reduced than in the case of oil.
Work is being carried out on European projects to deal with demand by
means of gas pipelines and LNG and looking for new sources of supply but we
must improve the transport infrastructure interconnections. In the opinion of
the speakers, the Green Paper does not sufficiently emphasise the role of LNG
in Europe.
Nuclear energy: The general opinion is that this energy source has been
strengthened recently. Nuclear energy is a fact in Europe and currently
represents a third of electricity production. Its use effectively falls under the
authority of member states. Nuclear reactors existing in Europe are in any
case, very safe and have major availability. The reference made in the Green
Paper that with the aim of increasing the safety of supply, "autochthonous
sources should be encouraged" as nuclear energy, was mentioned.
The safety and processing of waste are aspects that concern the citizen
in regard to the use of this technology. Progress should be made on the
identification of high-level waste storage in each country. Conversely, there are
significant uranium reserves to be able to use this energy source in the future.
Use will in any case depend on public acceptance for which continued dialogue
with civil society is very important.

10. The Green Paper on Energy Policy of the EU: 10/21 Conclusions
A Spanish vision
Renewable energies: Apart from the traditional advantages of the
absence of emissions, certain characteristics or advantages in renewable
images were mentioned such as the fact that their promotion usually leads to
other type of developments and production costs not being subject to the
volatility of traditional fuels.
Representatives of wind energy mentioned that the significant
development in Europe of this technology is justified by the increased energy
dependence and price of fuels. They defend premiums as the most effective
way of ensuring their promotion. As for the effects on operational electoral
systems, they mentioned that wind energy is ever more foreseeable since there
has been a lot of progress on the development of prediction models.
Centralised control offices for this type of production also help to improve their
management and integration with operation of the system.
Representatives of photovoltaic energy gave data on the positive illusion
of the efficiency this technology and future forecasts. They also mentioned that
the existence of the production premium has enabled dynamizing this
technology. Certain traditional companies are entering into the sector latterly.
The major increase in energy consumption and transport and therefore
their emissions is what is triggering the development of biofuels. Unlike what is
occurring in the United States and Brazil at the moment, there is no major
takeoff in Europe. Spain however is moving towards these energy sources.
The absence of a biofuels market (bioethanol or biodiesel) is making their
promotion difficult. Representatives in the sector requested more effort on a
European scale, better ordering of the market and establishment of binding
objectives in such a way that this industry can really develop in Europe.

11. The Green Paper on Energy Policy of the EU: 11/21 Conclusions
A Spanish vision
The fight against climate change
The fight against climate change is effectively a priority in the EU,
efficiency and energy savings being the clearest forms of fighting it. The
emissions trading system is also a very useful tool for putting a price on carbon
and helping to take rational decisions to reduce emissions.
The use of certain fuels or technologies such as natural gas and
combined cycles is also contributing to deal with consumption containing
emissions although obviously renewable energies and nuclear energy are the
technologies that may best contribute to a free supply of emissions.
It was also mentioned that the current progress of consumption is not
sustainable, there also existing a major imbalance between countries. It is
calculated that there are 1.6 billion people who do not have access to
electricity.
It is true that at least in OECD countries major progress has been made
on energy efficiency but there is still a lot to be done especially in the transport
and residential sectors. The weight of the EU is small but it has to serve as an
example for the rest of developed or developing economies to make more effort
to improve energy saving and efficiency. As one of the speakers mentioned, it
is not a question of how much we can save but rather how much we can
consume.

12. The Green Paper on Energy Policy of the EU: 12/21 Conclusions
A Spanish vision
Innovation and technology
A change in the current situation is necessary to be able to continue
supplying energy to future generations. There is a positive feeling with respect
to the possibilities of science and technology to make this change possible.
One of the technologies mentioned in this aspect is the capture and
sequester of CO2 in coal plants. Technical developments are very advanced and
as CO2 costs increase, they will be more profitable.
Ambitious research programmes from the nuclear sector were also called
for on this technology to be able to move forward in the design of safer and
more efficient new generation reactors.
Some of the speakers suggested that progress be made preferably on
research and development before promoting a premature introduction of
technologies.
The importance of research on energy efficiency that may really
contribute to significantly reducing consumption and therefore CO2 emissions
was also mentioned.
Foreign policy
Due to the problems being global, it is hoped that the solutions will also
be global. Some other speakers expressed their scepticism however that
progress can be made in this field.
On the other hand, energy policy should favour the access of companies
to strategic areas.
One of the foreign policy initiatives contained in the Green Paper that
was positively evaluated was the international agreement on energy efficiency.

13. The Green Paper on Energy Policy of the EU: 13/21 Conclusions
A Spanish vision
Final observations
Other types of observations in which the rapporteur tried to summarise
the main messages expressed by speakers at the seminar are included in this
section:
First of all, effectively within the conference the magnitude of the
challenge that exists globally and in particular in the EU for dealing with energy
needs of future generations in a sustainable, competitive and safe way was
assumed.
Despite the fact that energy consumption is increasing and reserves of
fuels are obviously reducing, no sensation of crisis in regard to this problem
was transmitted at the seminar. There was insistence in all sectors on the need
to stop leaving it to chance for the markets to form prices freely. High prices, if
they really meet market rules, will act as an incentive for new investments,
contribute to energy saving and efficiency and finally boost the development of
other energy sources and technologies that are not competitive and in
situations of lower prices.
Greater urgency for climate change actions was however transmitted.
The actions within the EU to promote energy saving and efficiency and the use
of technologies that emit less and the international work of other both
developed and emerging countries are extremely important in this aspect. With
the former, the EU should continue efforts to reduce its emissions and
contribute to the reduction of global warming, thereby avoiding at the same
time European industry losing competitiveness compared to that of these
countries. The action and support of emerging countries should be directed in
turn to enabling or improving access to energy to those who do not have it, by
using the most efficient and sustainable technologies wherever possible.

14. The Green Paper on Energy Policy of the EU: 14/21 Conclusions
A Spanish vision
The Green Paper effectively establishes a series of challenges and
proposes different solutions. The debate did not go so much into specific
proposals from the Commission for each one of the areas. However, the
following messages or principal actions are worth highlighting:
1- The need to complete domestic electricity and gas markets is fully
assumed. Integration in regional markets is a practical form of making
progress along these lines. Except for a reference to transit regulations
in the case of gas, it was judged that new regulations are not necessary.
2- It is necessary to advance on the construction of electricity and gas
interconnections. Any initiative from the Commission along these lines
such as priority networks is therefore welcome.
3- It is not necessary to increase current levels of gas or oil product
reserves.
4- Priority of action by the European Union as to foreign policy falls more
within the scope of achieving an international undertaking to fight
against climate change rather than contributing to the safety of fuel
supply.
NOTE: This document has been written by the principal rapporteur, Mr.
Fernando Lasheras García, Director of the Iberdrola office in Brussels.

15. The Green Paper on Energy Policy of the EU: 15/21 Conclusions
A Spanish vision
ANNEX 1
SEMINAR PROGRAMME
16 May 2006
9.00.- INAUGURAL SESSION
Carlos Pérez de Bricio Olariaga
Chairman
SPANISH ENERGY CLUB
“The safety of supply in Spain”
Antonio Joaquín Fernández Segura
Secretary General for Energy
MINISTRY OF INDUSTRY, TOURISM AND TRADE
I PANEL. Energy sectors facing up to the European challenges of the Green Paper
10.00.- OIL: ENERGY DEPENDENCE AND SAFETY OF SUPPLY
Rapporteur:
Jorge Segrelles García
Chairman
WORLD OIL CONGRESS ORGANISING COMMITTEE
Speakers:
Luis Javier Navarro Vigil
Chairman
BP ESPAÑA
Dominique de Riberolles
Chairman
ASSOCIATION OF OIL PRODUCT OPERATORS
José Luis López de Silanes Busto
Chairman
HYDROCARBONS LOGISTICS COMPANY

16. The Green Paper on Energy Policy of the EU: 16/21 Conclusions
A Spanish vision
Antonio Merino García
Studies and Market Analysis Director
REPSOL YPF
11.15.- NATURAL GAS: GAS MARKET, TRANSPORT AND STRATEGIC
RESERVES
Rapporteur:
Juan Emilio Iranzo Martín
Director General
INSTITUTE OF ECONOMIC STUDIES
Speakers:
Javier Alcaide Guindo
Director of studies
ENAGAS
Pedro Miró Roig
Chairman
MEDGAZ
José Mª Egea Krauel
Gas Gestion Director General
GAS NATURAL
Elías Velasco García
Chairman
UNIÓN FENOSA GAS
12.15.- COAL: PRESENT AND FUTURE; A CLEAN ALTERNATIVE?
Rapporteur:
Ignacio Méndez de Vigo y Vega de Seoane
Board member
ELCOGAS
Speakers:
Victorino Alonso García
Chairman
CARBUNIÓN
Santiago Sabugal García
Engineering Director I+D
ENDESA

17. The Green Paper on Energy Policy of the EU: 17/21 Conclusions
A Spanish vision
Thorsten Diercks
Secretary General
EUROPEAN ASSOCIATION FOR COAL AND LIGNITE (EURACOAL)
13.15.- RENEWABLE ENERGIES, SUSTAINABLE OPTIONS
Rapporteur:
Enrique Martínez Pomar
Director General
ASSOCIATION OF PRODUCERS AND AUTOGENERATORS WITH
SOURCES OF RENEWABLE ENERGIES
Speakers:
Fernando Ferrando Vitales
Chairman
CORPORATE WIND ASSOCIATION
Roberto Legaz Poignon
Development Director
IBERDROLA
Ernesto Macías Galán
Vice Chairman
EUROPEAN PHOTOVOLTAIC INDUSTRY ASSOCIATION (EPIA)
Oliver Schaefer
Corporate director
EUROPEAN RENEWABLE ENERGY COUNCIL (EREC)
Biofuels
Ramón de Miguel y Egea
Chairman
EUROPEAN BIOETHANOL FUEL ASSOCIATION (e-BIO)
14.30.- LUNCH-CONFERENCE
“The study of the vulnerability of European energy”
Slav Slavov
Coordinator of Regional Programmes
WORLD ENERGY COUNCIL

18. The Green Paper on Energy Policy of the EU: 18/21 Conclusions
A Spanish vision
16.00.- ELECTRICITY MARKETS: REGULATION, GENERATION AND
INTERCONNECTIONS
Rapporteur:
Pedro Rivero Torres
Vice Chairman
SPANISH ELECTRICAL INDUSTRY ASSOCIATION (UNESA)
Speakers:
Carlos Sallé
Director of Regulation
IBERDROLA
Alberto Carbajo
Director of Operation
ELECTRICAL NETWORK
16.45.- NUCLEAR ENERGY: ENERGETIC AUTONOMY AND SUSTAINABILITY
Rapporteur:
Santiago San Antonio Guerrero
Director General
SPANISH NUCLEAR INDUSTRY FORUM
Speakers:
Fernando de Esteban
Deputy Director General
DG TREN – EUROPEAN COMMISSION
Emilio Mínguez Torres
Vice-Chancellor for academic and teaching body management
UNIVERSIDAD POLITÉCNICA DE MADRID
José Alejandro Pina Barrio
Chairman
NATIONAL RADIOACTIVE WASTE COMPANY (ENRESA)
Luis Echávarri Lozano
Director General
NUCLEAR ENERGY AGENCY

19. The Green Paper on Energy Policy of the EU: 19/21 Conclusions
A Spanish vision
17 May 2006
II PANEL. The Green Paper and energy challenges of the EU
9.00.- THE GREEN PAPER AND ENERGY CHALLENGES OF THE EU
Rapporteur:
José Sierra López
Member of the board
NATIONAL ENERGY COMMISSION
Speakers:
Rafael Miranda Robredo
Chairman
UNION OF ELECTRICITY INDUSTRY
(EURELECTRIC)
Pieter Tjan
Secretary General
EUROPEAN PETROLEUM INDUSTRY ASSOCIATION (EUROPIA)
10.15.- THE GREEN PAPER AND ENERGY EFFICIENCY
Rapporteur:
Carlos García Baquero
Director of the Studies Service
INSTITUTE FOR DIVERSIFICATION AND ENERGY-SAVING (IDEA)
Speakers:
José Ignacio Pérez Arriaga
Professor
UNIVERSIDAD PONTIFICIA DE COMILLAS
Didier Bosseboeuf
ADEME
11:15.- Coffee break
11:30.- THE GREEN PAPER AND THE EUROPEAN ENERGY MODEL
Rapporteur:
Arturo Rojas Parada
Partner director for sectorial analysis
FINANCIAL ANALYSTS

20. The Green Paper on Energy Policy of the EU: 20/21 Conclusions
A Spanish vision
Speakers:
Heinz Hilbrecht
Director of Conventional Energies
GD TREN – EUROPEAN COMMISSION
Johannes Maters
Senior Fellow
CLINGENDAEL INTERNATIONAL ENERGY PROGRAMME
Juan de la Cruz Ferrer
Partner
ARIÑO AND ASSOCIATES
Walter Boltz
Vice president
CEER (COUNCIL OF EUROPEAN ENERGY REGULATORS)
13.15.- CLOSING SESSION
Carlos Pérez de Bricio Olariaga
Chairman
SPANISH ENERGY CLUB
Heinz Hilbrecht
DGTREN
EUROPEAN COMISSION
Principal Rapporteur:
Fernando Lasheras García
Director
IBERDROLA OFFICE IN BRUSSELS