The Energy Union is an opportunity that with the right political backing and investment, could transform Europe’s energy sector. Yet what is needed is more careful thought on how to engage local government before sound bites – at least for communities – are to be believed, writes Markku Markkula.
Markku Markkula is president of the European Committee of the Regions.
The Energy Union package makes a significant attempt to answer one of the most pressing challenge of our times: ensuring a safe reliable energy supply at affordable prices whilst respecting our environment. The European Commission’s proposals use all the right sound bites: liberalised and integrated European energy market; energy security and efficiency; decarbonised economy; innovation and competitiveness. A recent European Parliament report even suggests that if brought to fruition, an integrated single energy market could bring €250bn of annual savings. But as Commissioner Cañete recently declared, legislation is only as good as its implementation which is why a far greater emphasis on local and regional governments is needed if this master plan is to be realised.
For the European Committee of the Regions (CoR) energy efficiency should be the central plank of the Energy Union and by the Commission’s own admission, if Europe were to meet its efficiency potential, gas imports would fall by 40% over the next 15 years. The Commission recognises the importance of “Smart Financing for Smart Buildings” but is this enough? Though there have been marked differences in ambition between the EU and local governments on energy efficiency – the CoR recently called for a 40% reduction in primary energy consumption achieved through efficiency gains (the Council finally agreed on 27%) – the Commission must exploit this second wind of opportunity to drive forward the energy efficiency agenda.
An important cornerstone to creating a true Energy Union is to improve the flow of energy across Member States. It is encouraging that the Commission wants a target of 10% electricity interconnection which needs cross-border collaboration. But the Energy Union offers little in defining the role of local governments which is why the CoR has prioritised working with all institutions to improve the regulatory and financial conditions for local and regional investment on sustainable energy.
Partnership building between local governments in Smart City intiatives are crucial in integrating areas such as energy saving in urban transport, inter-regional communication strategies, cooperation in new storage technologies and smart public buildings. The European Structural and Investment Funds – along with the European Strategic Investments Funds – are vital to delivering cross-border renewable energy projects. My own city of Espoo in Finland, for example, is opening new avenues where policy programmes are jointly chaired by top decision makers and civil servants intent on innovating and integrating different opportunities of sustainability. They aim to offer concrete actions by mobilising the city, citizens, industry, universities and other stakeholders.
Taking a cross-cutting policy approach is a step forward and linking energy policy with innovation and research can make strides towards creating a true Energy Union. But it’s important to throw caution to the wind: well intentioned legislation must not burden the energy industry whom are needed to drive this technological transformation. A lack of balance between targets, legislation and flexibility is one of the main obstacles to creating a well-functioning energy market. What is therefore absent is the lack of reference to the regional aspects of smart specialisation strategies which are already being effectively rolled-out in Europe’s regions. Setting up highly technological industrial sectors, facilitating the active management of demand, smart energy use and energy efficiency, in close cooperation with research centres and universities, must be prioritised.
Implementing Energy Union policies depends on political ownership at all levels of governance including a strong commitment from regions and cities. Despite being instrumental in delivering renewable energy, innovation and energy infrastructure and supply, greater clarity on how local and regional governments could be involved is needed. A starting point could be involving CoR in the development of new legislation and assurances that a local authority representative be involved in all national energy regulatory bodies.
At an EU level, we hope that the Agency for Cooperation of Energy Regulators and energy infrastructure forum include CoR membership. We also need to considerably improve the conditions for the financing of energy efficiency projects at the local and regional level. The Energy Union is an opportunity that with the right political backing and investment, could transform Europe’s energy sector. Yet what is needed is more careful thought on how to engage local government before sound bites – at least for communities – are to be believed.