Commission outlines Energy Union legislative path

Maroš Šefčovič calls 2017 "the year of implementation". [European Commission]

Commission Vice-President Maroš Šef?ovi? unveiled the executive’s plans for laying the foundations of the Energy Union, until the end of its term in 2019.

Speaking to a small number of journalists ahead of the publication of a massive package of documents due today (19 November),  Šef?ovi? regretted the timing of the launch of the Communication, which comes when public attention is focused on the Paris attacks, and the need to strengthen security in the Union.

But Šef?ovi? said that the French set a good example, by sticking to their plan to host COP21 from 30 December, and stated that he was to meet in Paris French Minister of Ecology, Sustainable Development and Energy Ségolène Royal very shortly.

The Vice-President said that the European Commission needed “a very solid place in the political calendar” of the EU, in order to push forward on the Energy Union, despite negative political developments.

He said that in the same way as EU heads of state and governments discussed macroeconomics at regular summits in Spring and Summer, the Commission wanted political attention for the Energy Union in the Autumn.

“This is important to have regularity in assessments, to synchronise reporting obligations from the Commission to the member states and vice-versa,” he said.

Šef?ovi? explained that the executive wanted to present its Communication not only to the energy ministers, but to the ministers of environment, of transport, and to the competitiveness ministers, who are responsible of research and innovation. He said he hoped that the issue would be taken up at EU summit level, although he conceded that it won’t probably be the December summit.

“But from the perspective of next year, it’s clear that with all these proposals we are going to put on the table, I’m sure we will need a strong involvement of heads of state and government. We will need a political debate at the highest level, and I think we will need some arbitration as we will be progressing with our proposals,” Šef?ovi? said.

Structure of the package

Refereeing the package of documents due to be presented today, Šef?ovi? explained that those consist of the political communication, which includes progress achieved, plans for the future, and policy conclusions. These would be linked to annexes which would spell out how the national energy and climate plans should be drafted, as the Commission wants to gather those plans by 2017.

As a second part of the package, the European Commission is presenting the key indicators document, which he called “very technical”, but which would allow it to monitor in the future how member states and the Union as a whole is progressing in implementing energy policies.

A third element of which Šef?ovi? said he was very proud was a 28-country analysis, produced on the base of very intense bilaterial consultations.

Beyond this “governance package”, Šef?ovi? said that a second list of projects of common interest was to be presented, with 195 infrastructure projects in the fields of electricity and gas. He said an “enormous amount of work” had been invested in compiling this list, as it had been discussed first at the level of transmission system operators, and then at the level of member states.

Šef?ovi? said the goal was to progress fast in the implementation of these projects, with an annual review on the progress and quick identification of the eventual hurdles and tailor-made assistance to overcome the problems.

Two more deliverables are the reports by Consumers Commissioner V?ra Jourová, on making sure that consumers are in the centre of EU’s energy policies, and a document from Eurostat, on how to access energy prices across Europe, which would assess what component in the energy price is energy-related, and prompt discussions at the national level if practices need to be changed.

Political messages

Regarding the political messages, Šef?ovi? said that the first was linked to COP21, and highlights the fact that the EU wants to continue its leadership in the transition toward low-carbon societies.

The second message, he said, is that this transition should be socially fair and consumer-centred, meaning that a lot of attention would be devoted to tackling the energy poverty issue, as well as the issue of professions linked to energy transition that are disappearing.   

The third message, according to the Energy Union chief, is that the geopolitical challenges are not going away, which means that in terms of energy security, more diversification, better connections, and better functioning of the internal energy market, matter.

The fourth and last message is that the EU is establishing a mechanism that brings transparency and predictability to investors. Šef?ovi? said that investors had frequently asked for assurances about the EU’s vision, that policies would not be changed every two-three tears.

Legislative plans for 2016

Šef?ovi? said that for his services, 2016 was “very clearly the year of delivery”.

“We want to deliver 90% of what we promised to do under the Energy Union umbrella,” he said, explaining that this would be presented in three legislative packages.

In February 2016, the security of supply package will likely be presented, which will contain the new security of gas supply directive, the LNG strategy, and provisions for more transparency for Intergovernmental Agreements (IGA’s). Sefocovic referred to the IGAs signed between a number of EU member states and Russia on South Stream, which proved to be in breach of EU law. The heating and cooling strategy would be part of the same package.

In summer, Šef?ovi? stated that the Commission plans to show “that we mean business after Paris”, meaning that after COP21, the executive would present its effort-sharing decision.

“That in practice means that every member state will get one number, and this number will represent the percentage by which they will have to decrease greenhouse gas emissions in the non-ETS sector, meaning in transport, buildings and agriculture. This would go together the Commission communication on decarbonisation of transport, on the Commission proposal on emissions performance of buildings and “Land Use, Land Use Change and Forestry” (LULUCF) sector, which is very important for agriculture.

In autumn, the European Commission plans to present its comprehensive strategy in the field of innovation in the field of energy. The last package would be centred around the new electricity market design, together with a new directive on renewables, where the Commission would have to factor in the new target for 2030, and make sure that collectively, the EU would be able to deliver.

“We are pushing all these files as much as we can, with the clear aim to present to the member states all the pieces of the puzzle,” Šef?ovi? said, adding that by doing this, the Commission would also ask member states to proceed with the draft national energy and climate plans.

Šef?ovi? said he knew member states had a preference to start the elaboration of the national plans on a later date, but added that the Commission considered that 2017 should be the “ideal date”, because then the Commission could work on the real plans still on 2018, allowing the EU executive to make an assessment before the end of its term in 2019.

“This would set very solid foundations for the Energy Union for the next European Commission,” he added.

The EPP group in the European Parliament said that it is of the utmost importance that the plans to build an Energy Union in Europe truly support one of the main goals: to become less dependent on imported energy, most notably less dependent on Russian gas supplies.

"We have to defend our principles of European energy security and diversification of energy routes and energy sources in each project we have in Europe", said Françoise Grossetête MEP, Vice-Chairwoman of the EPP Group responsible for the Working Group on Economy and Environment. "The implementation of the Energy Union has to be done quickly, and we also need to focus more on better governance where the European Parliament has to play its full role", Grossetête stressed.

Green energy spokesperson Claude Turmes said: "The Commission has clearly recognised some of the core priorities that need to be achieved in the context of the Energy Union, if it is to be a real basis for a meaningful energy transition (...). However, overall the picture is incomplete."

"President Juncker promised to make Europe the 'world number one' on renewable energy but the Commission has failed to outline how to increase the EU's ambition to this end. This threatens our clean technology leadership in sectors where we still have it (such as wind and solutions for the urban environment) and would compound our loss of leadership in other sectors (such as photovoltaics). It is not clear how the weak and non-binding 2030 target agreed by EU governments will move us towards this goal. Just weeks out from the COP21 UN climate summit in Paris, this is a missed opportunity to show that Europe is also moving forward."

"The Commission has also missed an opportunity to criticise the wrong-headed Nord Stream gas pipeline project. This project and its expansion is not a solution for Europe's energy security and would undermine the situation in eastern EU member states and Europe's eastern neighbourhood. The Commission should come out and clearly say so," Turmes added.

S&D vice-president on sustainability Kathleen Van Brempt said: “We are happy to see a strong focus on energy poverty and proposals to tackle vulnerability through energy efficiency legislation. As a Group we will request a specific communication on energy poverty accompanied by an action plan – in order to ensure that citizens are also at the centre of the Energy Union." 

“We are convinced that a smart transition to a sustainable energy model is not only feasible but indispensable for Europe and for the world. In a weeks' time world leaders will meet in Paris for the COP 21 climate summit, and the EU should lead by example. But we can only do so if we commit ourselves – both EU as a whole and member states – to reaching our targets.”S

Liberal and Democrat MEPs welcomed too the Commission's announcements, but believe much more needs to be done by EU countries to reduce dependence on imported fossil fuels and de-carbonise the European economy.

"The excellent work done by the Commission identifies the scale of the challenge ahead of us. In many areas national governments are failing to deliver on their own agreed objectives, leaving Europe vulnerable to external pressures on our gas supplies, and lagging behind on our climate change responsibilities," said ALDE MEP Morten Helveg Petersen. "Europe needs a holistic approach to addressing these challenges, we need integrated solutions in order to get more renewables into the energy mix, cut our carbon footprint and use scarce energy supplies in the most efficient ways.

The Energy Union package has not lived up to expectations to accelerate a shift to a fossil fuel free economy in the EU so far, said Climate Action Network (CAN) Europe. While the project remains a puzzle, the EU needs strong and coherent legislative proposals, expected next year, to stay ahead of the game on climate action.

"The Energy Union has not yet delivered on its promise of guiding Europe's transformation away from a fossil-fuel based economy," said Wendel Trio, Director of CAN Europe. "The report does not provide clarity on how the current, inadequate climate and energy targets will be revised and strengthened. Such a gesture would have sent a clear signal of Europe's leadership ahead of the climate summit in Paris."

The European renewable energy industry welcomes the first State of the Energy Union which reiterates the Commission’s commitment to a decarbonised energy system and sets milestones for the future governance of the Energy Union.

The COP21 conference is a stark reminder that the European Union needs to step up its ambition on renewables. Whereas an increasing number of developing countries are accelerating their efforts to combat climate change by setting long-term renewable energy objectives, only four EU Member States have so far come forward with concrete renewable energy targets beyond 2020. 

A robust and reliable governance system is necessary to fill in the current regulatory vacuum and to ensure that the EU has a strong home market able to deliver the economic and job creation benefits of renewable energies to European citizens.

Eurofuel, Europe’s heating oil industry, described the omission of hybrid energy solutions in the first-ever Communication on the State of the Energy Union as a missed opportunity.

“The Juncker Commission promised to be big on big things and to focus on matters which have a significant impact on the lives of European citizens. With more than 50 million people in Europe affected by energy poverty, the affordability, security and sustainability of energy must be addressed in joined-up policy. Hybrid heating systems create efficiencies and cut emissions. Hybrid systems are key to an efficient energy transition as they speed the take-up of renewables through innovation, adaptation and systems’ reuse while at the same time achieving a genuine leap forward in energy efficiency,” said Eurofuel President Jeremy Hawksley.

"The value of hybrid heating systems goes beyond immediate environmental gains. Hybrid systems are also socially fair, affordable and deliver that all-important security of supply. We need policies that ensure everyone in Europe can afford to heat their homes during the winter. Policies that ensure security of supply.  Policies that ensure people and planet are both winners in the Energy Union. Hybrid heating systems are already speeding progress to a renewable and efficient energy future, helping homeowners to reduce their environmental footprint while ensuring reliable heat supply and reducing the risk of fuel poverty among the most vulnerable in society," Hawksley added.

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