The European Union: An energy Walmart?

The European Union will soon be exercising its combined market muscle in energy negotiations by granting its executive authority the power to bargain on behalf member states. States had previously struck deals individually.

A meeting of the EU's leadership in Brussels concluded today with leaders having agreed to involve the European Commission in contact negotiations with energy suppliers. The decision was inspired by Russia's influence over European natural gas supplies.

Like Walmart, the EU is the biggest buyer of its kind. The European market is comprised of 20 million companies and 500 million people, according to the AFP.

Walmart's buying power leaves its suppliers with very little room to negotiate, giving it the capacity to sell goods at low prices. The EU is more concerned about its energy supply risk. In 2009, a dispute between Russian and Ukraine resulted in gas pipelines shut down in the dead of the European winter.

The European Council concluded that there is a "need for better coordination of EU and Member States' activities with a view to ensuring consistency and coherence in the EU’s external relations with key producer, transit, and consumer countries."

Also today, EU leaders agreed to a landmark trillion-euro effort to provide Europe with greater energy independence. The investments will link up regional power grids and gas pipelines as well as increase sources of renewable and nuclear power.

The EU made a US$200 million downpayment to fund renewable energy projects throughout the continent in November.

This post was originally published on Smartplanet.com