The EU’s great new project of an “Energy Union” will represent “for the first time a holistic approach to how we need to achieve the energy transition,” said the man in charge, Commissioner Maroš Šefčovič, at a press conference in Brussels last week. His colleague, Climate and Energy Commissioner Miguel Arias Cañete, at a grand Energy Union in Riga on Friday, revealed a long list of actions to be subsumed under the Energy Union concept, but with no clear priorities. The key question of governance – how the EU is going to implement the Energy Union – was left hanging, reports Sonja van Renssen.
The Energy Union was officially kicked off last week, with a press conference on 4 February in Brussels by the Vice President in charge of Energy Union, Maroš Šefčovič, followed by a big Energy Union event in Riga on 6 February, where it was Latvia’s turn, as holder of the rotating EU presidency, to fire off the Energy Union rocket. Everyone was there – both Šefčovič and his fellow climate and energy Commissioner Miguel Arias Cañete, as well as EU energy ministers, academics, industry, NGOs, etcetera. All this is in preparation for 25 February, when the Commission is due to present its Energy Union strategy as well as a list of (legislative and non-legislative) proposals for action on other topics. These include the EU’s proposal for UN climate talks in Paris in December and a progress report on a 10% European electricity interconnection target on the same day.
Šefčovič suggested that greater transparency could be a substitute for a common gas purchasing platform
So what do we know now about what the Energy Union is going to consist of? How will it differ from existing EU energy and climate policy? At his press conference, the only thing that Šefčovič let slip was that he saw a clear connection between the Energy Union and “the energy transition”. He said: “This is the first time we have a holistic approach to how we need to achieve the energy transition.”
While Šefčovič stayed rather vague, he left it to his colleague Cañete to do the honours of announcing a long list of concrete actions in Riga, that quite closely resembled the 12 concrete action points listed in draft internal Commission document leaked to blogger and Twitterer Alice Stollmeyer last week. (See below)
Full weight of the law
To begin with, Cañete made a commitment to revise an outdated 2005 regulation on security of electricity supply. Other new security of supply announcements include plans for a new LNG strategy for Europe, a strategic alliance with Turkey (all the more in the picture with the spectre of “Turkstream”) and a paper on “promoting domestic resources”. The latter came with a special mention of shale gas, although fracking is having a hard time of it lately – Chevron recently became the latest company to announce it would pull out of shale gas in Poland.
Further priorities for the Commission include accelerating progress on a Mediterranean gas hub, establishing new strategic partnerships with Algeria and Ukraine and “strengthening” the Energy Community in Southeast Europe. Šefčovič visited Sofia, Bulgaria, for the first session of a high-level group on gas set up after South Stream was cancelled and will travel to Baku, Azerbaijan, on 12 February for a meeting about the Southern Gas Corridor. The Commission also wants better coordination on international energy issues (via a revision of the rules on intergovernmental agreements). Šefčovič at his press conference in Brussels suggested that greater transparency could be a substitute for a common gas purchasing platform.
Cañete in Riga said he wants to see the full weight of the law brought down on Member States that have not yet (fully) implemented the third energy market liberalisation package. He promised he would tackle energy poverty (the Commission will do further study into energy subsidies and how prices are set); adopt a more regional approach; and re-assess the powers of EU-level bodies to manage the grid. The Commission will launch a paper on market design this year.
“The Energy Union cannot be a mere reformatting of what we already do”
Hints of the follow-up to last October’s conclusions on a new climate and energy policy for 2030 – now presumably part of the Energy Union – also came. The Commission will propose a new “renewable energy package” – no indication of timing. What we know already is that once a market stability reserve is agreed for the EU Emission Trading Scheme (ETS), legislative proposals for further reform of that will follow this year still.
Fundamental and lasting change
Cañete singled out for special attention energy efficiency and reducing demand, proposing a revision of relevant laws (eco-design, energy labelling, energy efficiency in buildings, and the 2012 energy efficiency directive), plus a new heating and cooling strategy, the promotion of electro-mobility, and again, that regional approach: smart cities and communities, and a Covenant of Mayors used “to its full potential”.
Research and innovation got a mention with a pledge to revive the Strategic Energy Technology (SET) Plan, “make up lost ground” on energy storage, and use the Juncker investment plan to ease access to capital for industries such as solar PV. On 4 February, on the back of a visit to Poland, Šefčovič also noted that carbon capture and storage (CCS) and “clean coal” are an important field of research.
In Riga, Cañete left “governance” for last and with reason: everything hangs on this. Do member states actually want to work together and take decisions through Brussels? That’s the big question. “Solidarity and collective action are principles that have underpinned our European project from the outset,” said Cañete. “These same principles must guide us as we build our Energy Union together.” Cañete concluded: “The Energy Union cannot be a mere reformatting of what we already do, or a mere work programme for the next five years; it is a commitment to fundamental and lasting change.”
For more on the Energy Union, see also Sonja van Renssen’s interview of 3 February last week with former Director in charge of the Internal Energy Market at the European Commission, Jean-Arnold Vinois: “A ‘J’Accuse’ from an ex-EU official: only a real Energy Union can save the EU energy market.”
Blogger and Twitterer Alice Stollmeyer posted a news item on her website revealing an internal paper on the Energy Union (dated 30 January). According to Stollmeyer: “The discussion paper gives a good preview of what we can expect from the ‘Energy Union Framework Strategy’ which is scheduled to be adopted and published by the EU Commission on 25 February. Reading the paper, it is clear that a more appropriate name for this key EU project would be ‘Energy and Climate Union’ or even ‘Climate and Energy Union’. Because the bottom-line of ‘why Europe needs an Energy Union’ is climate, says the EU Commission: ‘Europe has no choice: if it continues on the present path, the unavoidable challenge of shifting to a low-carbon economy will be made harder by the economic, social and environmental costs of having fragmented national energy markets. The Energy Union is the EU’s answer to this challenge.’ [My emphasis, AS.] The Energy Union can thus be summarized as the European energy transition to a ‘sustainable, low-carbon and environment-friendly economy that is designed to last’.”
The paper notes 12 concrete actions, as reported by Stollmeyer:
- ‘The Commission will develop a resilience and diversification package for gas, including facilitating a major increase in gas imports from the Southern route, the Mediterranean and Algeria.
- The Commission will propose legislation to manage electricity security of supply at the European level and fully open capacity mechanisms to cross-border participation.
- The Commission will propose a revision of the Decision on Intergovernmental Agreements to ensure more effective transparency and cooperation as well as full compliance with EU law.
- The Commission will develop legislative proposals for a new European market design based on fully integrated wholesale and retail markets and delivering a new deal for energy consumers.
- The Commission will propose legislation to improve the effectiveness of the European energy regulatory framework.
- The Commission will fully engage with Member States and stakeholders in the development of regional approaches to market integration, as a step towards or an integral part of an EU-wide integrated market.
- The Commission will propose new legislation to meet the 2030 energy efficiency target based on the revision of the energy efficiency and performance of buildings Directives.
- The Commission will develop a ‘Smart Financing for Smart Buildings’-initiative to make existing buildings more energy-efficient, facilitating access to existing funding instruments.
- The Commission will propose legislation to achieve the GHG reduction targets agreed at the October 2014 European Council in the ETS and non-ETS sectors.
- The Commission will speed up the decarbonisation and electrification of the transport sector and integrate the energy and transport systems.
- The Commission will propose legislation to meet the 2030 EU renewable target and ensure that the European renewable target is met cost-efficiently.
- The Commission will develop a forward-looking, energy and climate-related R&I strategy to maintain European technological leadership and expand export opportunities.’