Kadri Simson: We need €260bn per year for European Green Deal

European Commissioner for Energy, Kadri Simson, speaks during a ceremony in front of the EU Court of Justice in Luxembourg on 13 January 2020. [EPA-EFE/JULIEN WARNAND]

Energy Commissioner Kadri Simson talked about the Green Deal and energy issues with EURACTIV Croatia while she was in Zagreb for the meeting between the Commission and the Croatian government.

Estonian politician Kadri Simson is the Commissioner for Energy in Ursula von der Leyen’s College.

She spoke to EURACTIV Croatia Editor-in-Chief Zeljko Trkanjec.

More than a month after taking up your post, what are the biggest challenges that you see on a strategic level in your portfolio?

This is a new Commission, I would call it a “Green Deal Commission”, this is the major initiative that we are moving forward carbon neutrality by 2050. You can’t do it without closely monitoring energy. Right now 75% of greenhouse gas emissions are coming either from producing or consuming energy. So, I am in the core of this initiative.

For me, the most important thing is to secure public acceptance and support. There are young people on the streets worrying about what is going on with our climate and at the same time, different member states are in different starting positions. There are big discrepancies between the regions. So, we decided that no region will be left behind and there should not be consumers left behind. And, how to secure affordable energy and how to secure just transition. These are the goals.

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How would you describe “affordable energy”?

If we are talking about affordability, it always comes with security. No one cares about the costs if you do not have, for example, electricity. My responsibility is to secure diverse suppliers for energy. When we are talking about affordability, then it would be to secure the competitiveness of all companies and to think about what will be with our consumers, what will be their bills.

We have energy poverty, in some states, it is critical to pay your monthly heating bills. And 40% of our energy consumption is coming from heating and cooling. One of our initiatives will be a renovation wave – if you renovate buildings, costs or energy consumption are lower.

Are you satisfied with the diversification of the EU energy sources? Are we too dependent on Russia?

Russia has been an important partner especially when you talk about natural gas. And just weeks ago we finalised trilateral negotiations so that natural gas can come to the EU through Ukraine for the next five years. This is a good thing.

If we are talking about diversification we have to keep in mind there are other gas producers so we do support gas interconnections for example from Norway to Poland and LNG terminals. Then you can bring natural gas from Qatar or the US. This gives you independence. But, if we are talking about worries then we have to keep in mind that if you produce more renewables then they are local. And 41% of our electricity is produced by renewables.

Europe has a problem with interconnectivity, especially in Eastern Europe, from the Baltics to the Adriatic. How can the EU mitigate that problem?

There are special Projects of Common Interest aimed at solving the interconnectivity problem. Regionally there will be agreed on what kind of interconnectivity to build and right now we are negotiating with the European Parliament which projects will be on the next priority list. Now we have several gas projects, but in the future, we have to focus on electrification. And gas should not be natural gas any more but future-proofed gas, like biogas or hydrogen.

How can the Three Seas Initiative help in that aims?

In my previous life, I was a minister in Estonia and I participated in the Initiatives events. This year one of Three Seas event will be in my home country. I think it is very good if you have that kind of cooperation. Every kind of regional cooperation that helps to solve bottlenecks is worth supporting. Coming back to the interconnectivity, we will heavily invest in it because if we have better electricity connectivity, bigger markets then it will accommodate more renewables. With renewables, you have peak hours with wind power or sun and periods without that. To accommodate these irregularities we need a bigger market. This is one of my priorities, how to convince regions they should cooperate.

Green New Deal is the priority of this Commission. How it will be financed?

We know that we need additional financing. Only in the energy field, we agreed 20-30 targets, we need plus 260 billion euro annually. There will be offshore wind parks to be built where there is no activity at all now. And the majority of that money goes to the renovation wave. The cheapest energy, the most environmental energy is the one that we don’t use. If there are renovated buildings we save the planet and save money. And the money comes from different sources, we are negotiating Multiannual financial framework as a first source but we will mainstream our budget from all different funds that 25 per cent goes to climate goal. And at the same time, our aim is “do no harm” so whenever we will put money it will benefit our climate goal and not be used against it. And of course, there will be leveraging money: on Tuesday the Commission will accept financing mechanisms. We know there will be loans from EIB – part of it will be climate bank.

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Will there be space for private investors?

Of course. We can’t achieve our goals without private investors. We see that the Green New Deal will be a growth strategy. And they will invest because there will be new technological solutions, not only for Europe but also for our partners. We are already leaders for offshore wind technology and that means we are exporting our knowledge.

How will Green New Deal help EU competitiveness?

You can be competitive if you have an advantage, things smarter than others have. Part of the Green Deal is an investment in research and innovation. For achieving our final goal – carbon-neutral until 2050 – we have some already known solutions, but some of them are in the testing phase, some are not invented yet. The research will give us an advantage. It is comparable to telecommunications, how our phones look like 30 years ago and today.

So, we can conclude that the Green New Deal is an inclusive one for all European Commission portfolios?

It is. This is plan for new Commission and if we consider who is involved in this cluster here is commissioner for energy, of course, but also for transport, industry, science and research, regional development, taxes, health – part of it is better living conditions, that power plant next to your village does not pollute. And there is also a digital aspect. If we have bigger market it means we need digital platforms that consumers can follow on the hourly basis their energy consumption and price.

What can Croatian EU presidency do to help Green Deal?

We have to cooperate with member states. Without them, there is no Deal. And we have to cooperate with regions. There are still a lot of them dependent on mining solid fossil fuels. And we created a platform through which we can directly communicate with the mayors around the EU. When we are talking about energy, we have three pillars approach: people, planet and partnerships. People are our consumers. Without their support, we will not achieve anything. We have to make clear to them that producing clean energy locally is for their benefit. They have to be assured that we are doing it in a just way. The planet, well, if you see what is going on in Australia, rising water levels, you understand that we have to do something. It is like the latest moment. EU is producing only 10 per cent of greenhouses gases. Only 10 per cent. If we do something alone difference will be small. We have to find partners, especially in the close neighbourhood. So, we need all the help of Croatian presidency on all of these tasks.

In your speech on 10 December, you said: “We intend to develop a green agenda for the Western Balkans”. Can You give us more details about that?

Western Balkans are our priority partners. We know that one day they will be with us. They are neighbouring EU member states. It is important to share our experience, give technical advice about how can they depollute their economies. At the same time we are working with them closely on the interconnections. We will publish our agenda in 2020 and it will part of Croatian presidency and Western Balkans summit in Zagreb in May.

But Bosnia-Herzegovina is now building a coal-fired power plant and it will be financed by China.

Even inside the EU, each member state can decide what its energy mix will be. We have member states that still using coal, that using nuclear power plants for producing most of their electricity, ones that promise they will be 100 per cent renewable by 2035 and those who are still building pipelines for natural gas. And of course LNG terminals. Our possibility to find partners and explain to them that greener production of electricity is also useful for the economy comes when we are sharing best practices. One of the aspects is that if you have one provider of either coal or oil or natural gas means that you are dependent. Wind and solar are inside your territory. Locally produced they are benefits for your economy. We have witnessed that technical solutions are amazingly cheaper than ten years ago. And affordable.

[Edited by Zoran Radosavljevic/Sam Morgan]

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