EU unveils ambitious energy plans, as new standoff with Russia highlights Europe's dependence on Moscow

Oil-refining plant located in Belarus's town of Mozyr

The European Commission has unveiled an ambitious energy package, in a bid to combat climate change and reduce Europe's dependency on foreign energy sources. The move came just days after Russia turned off the taps on a key pipeline, running through Belarus to the Czech republic, Germany, Hungary, Poland and Slovakia. Moscow finally resumed oil supplies to Europe on Wednesday, but this new standoff with Russia’s President Vladimir Poutin, highlights once more the urgent need for Europe to diversify its energy resources.

The European Commission unveiled its wide-ranging energy package by taking a cold, hard look at the facts: World temperatures have risen over the last eleven years, including the ten hottest years on record; the European Union's energy dependence on foreign supplies could jump from 50 per cent of total energy consumption, to 65 per cent in 2030; and oil prices have risen six-fold in the last 7 years. European Commission President Jose Manuel Barroso said recent power blackouts and disputes, between Russia and its near neighbours have forced EU citizens to recognize the need to diversify supply sources.

European Union Commissioner for Energy Andris Piebalgs, left, talks to the media during a joint press conference with Russian Ambassador to the European Union Vladimir Schizov

"We need new policies to face a new reality. Policies which maintain Europe's competitiveness, protect our environment, and make our energy supplies more secure. Europe must lead the world into a new, or maybe one should say, post- industrial revolution, the development of a low carbon economy."

The European Commission has set ambitious targets to cut greenhouse gas emissions by 30 per cent by 2020- and called on all developed countries to do the same.But the Commission's plans to overhaul Europe's internal energy sector present an equally daunting task. Jose Manuel Barroso said Europe's gas and electricity markets are simply not performing well enough- an extensive review shows European energy companies are not transparent enough, not competitive enough and not co-ordinated enough.

The European Commission has unveiled some radical new approaches in the name of competitiveness, including something called "ownership unbundling" which would involve splitting energy companies between their different activities. For this to work, all national governments would have start breaking up energy monopolies so there can be more cross border competition, and much greater co- ordination between national energy sectors.

Solar power plant in Geesow next to Halle in Sachsen-Anhalt

"It is about a better deal for consumers- this is about making the market work, for the sake of citizens."

The European Commission also pointed the finger firmly at Russia for acting irresponsibly by cutting off oil supplies to Belarus. Despite a last minute deal, the European Commission says it should be able to guarantee energy supplies to member states.

"It is unacceptable that supply or transit countries interrupt the flow of energy to the countries that are consuming the energy without prior consultation- this raises a problem, a real problem of credibility."