Mr. Günther Oettinger:

Let me compare energy prices and global markets. Japan is not a problem for Europe because it has so many imports; it must buy more and more gas. Its price for electricity is higher than our price in Europe. It does not have any fuels of its own. It is a big, isolated island. There is no co-operation with anybody - North or South Korea, China or Vietnam. Japan has no advantage in terms of the energy price related to Europe and it will abandon nuclear power. It will not reactivate all existing power plants and therefore energy is no argument to be investing in Japan.

The United States is increasingly producing its own oil. It is accepting some environmental risks, as in the Gulf of Mexico. Its producers are entering deep water to drill, producing sand oil and fracking for oil. The United States has a lower tax rate and only some imports. By producing its own oil it has a big advantage relative to countries in Europe regarding the transport sector and other industries. In former times it imported large volumes of gas from Qatar and Nigeria. Now it does not need any gas from third states and will begin to export shale gas next year. The price of gas in the United States is 25% of that in Europe. There is, therefore, a big advantage. The reindustrialisation of the United States is a prospect and I regard the deindustrialisation of Europe as a danger.

A point was made on elasticity in taxation and pricing. There are two points of note on higher energy prices. First, the higher the price, the more efficient the consumption. This was a strategy. High energy prices make one more careful about using energy and one avoids energy consumption. Second, whenever a Minister for Finance had a problem with his budget, he developed a new energy tax. Increasingly, this practice is ceasing. I have two examples. In France the new President, Mr. Hollande, made a regulation to reduce the cost of petrol and diesel by six cent - three cent from the national budget and three cent from the market. As the market leader is state owned, it is just a public decision. A period of three months applies and it is a question of politics. This runs contrary to what occurred in former times. In Germany the Bundesrat, the second Chamber, asked the Chancellor to reduce taxation on electricity to strike a balance in respect of the increasing volume of renewables and higher guaranteed feed-in tariffs for renewables investment. Increasingly, Europe must work actively to avoid the next steps leading to higher energy prices.

We need more industries in Europe. It would be wrong to deindustrialise it. I refer to the production of steel, copper and aluminium and to the chemical, paper, textile and high-tech textile industries, for example.

With regard to regulation and the market, it is our obligation to reduce regulation. Let me be very frank: member states and the Commission may have varying positions. Increasingly, we develop regulated markets through nuanced market design. "Market design" is a wonderful term. I refer to subsidies, preferences in regard to infrastructure, feed-in tariffs and guaranteed prices, etc. On the subject of harmonising regulation, we ought to be more defensive in approaching new proposals. This should be a common approach in the European Union. We should be more critical of new proposals on regulation.

What can the Commission do? If member states accept our proposal for the next MFF for seven years, they will note three main programmes. First, there is some €9 billion available to connect countries in Europe. Second, there is €6 billion available for energy research in partnership with member states with a view to securing public-private projects. Third, there is up to €17 billion in the Cohesion Fund for our structural programmes. This is mainly to achieve energy efficiency in existing buildings. If a mayor of a city wishes to renovate a quarter of his or her downtown area, he or she can get money from the European Union budget. He or she must co-finance it using his or her own budget or that of his or her state. It is also a question of co-financing in order that private investors can renovate existing buildings in the best way to achieve energy efficiency which will be one of the main priorities in the next period in our cohesion programmes.

Consider wind power and the means of comparing investment and costs. The answer will depend not only on wind energy production but also on the oil price in 2020. With oil prices expected to increase step by step and peak oil perhaps behind us, renewables will become increasingly attractive. However, the price increases are not certain. The price of gas is decreasing and the Americans are using their own gas sources and do not need as much coal as they did in the last decade. Therefore, the price of coal on the global market is decreasing. Perhaps not in Denmark or Austria but in the global market fossil fuel prices are competitive.

We need some subsidies for renewables. The first need concerns infrastructure. Bearing in mind the nature of wind generation, one needs additional grid infrastructure where normally one would not need a grid. Infrastructure provision is a public obligation. The EU budget is to be co-financed by member states. Not all of the investment but some may be in our common interest. Second, there is a need for research. Research programmes on the newest renewable technologies are necessary for us to be more competitive in generation.

Perhaps we need some guarantees, or feed-in tariffs, but there ought to be a reduction. I accept the need for public expenditure on renewables but not as a never-ending story.

It should be combined with a clear strategy because at the end of the day renewables must be market-based. They must be competitive in the market and not depend for their entire lifetime on public expenditure. Therefore, we undoubtedly need the best locations. Photovoltaic production in Dublin is not meaningful, but it is in Madrid or in partnership with Morocco. Similarly, wind energy production in the North Sea and the Atlantic will be perfect in the long term. I am sure investment costs for offshore wind parks will fall. We have more and more experience of how to install them with specialised ships and greater expertise. Increasing numbers of companies are engaged and competition means lower prices. However, a period of approximately five to ten years will be needed, after which I hope offshore wind parks can be as competitive as onshore wind parks at the best locations increasingly are.

As for biomass, it has not been forgotten. Perhaps it will be considered in the next round.