The European Commission appears to be making a valiant effort at getting the Energy Union’s goals internalised into an institutional process that does not scare off Member States wary of “more Europe”. However, writes Oliver Sartor of the Institute for Sustainable Development and International Relations (IDDRI), the key test for the Energy Union will be how well it can succeed at getting Member States to buy into its objectives. The Energy Union incorporates many different policies and measures, says Sartor, but the Commission still seems reluctant to ask Member States to make clear commitments and develop a long-term vision of their energy transition.
On 18 November, the European Commission unveiled its first State of the Energy Union Communication (“SOTEU”). This Communication, along with a range of other documents released at the same time, begins to paint a picture of the Commission’s political strategy to turn the idea of a European Energy Union from concept into reality.
The annual SOTEU represents an important step in the development of the European Commission’s broader project to create what it calls a European “Energy Union”. The Energy Union project itself was born in February this year. The intent behind it is both practical and political. Practically, the EU cannot hope to achieve its different energy and climate objectives if it pursues the different parts of its energy policy in silos. But it is also a political project, with the aim of strengthening the momentum behind the individual dimensions of energy policy by bringing them together as part of one political narrative and institutional process.
What SOTEU does and doesn’t say
The first State of the Energy Union Communication provided the first narrative report by the Commission on the five “dimensions” of energy policy: energy efficiency; energy security; decarbonisation; completing the internal energy market; innovation and competitiveness.
The EU desperately needs to prioritise some technologies, such as in the area of storage, CCS, smart grids and breakthrough technologies for the decarbonisation of energy intensive industries
The outcomes of the progress reports in each of the five dimensions were generally not very surprising. The Commission highlights Europe’s recent, but generally well known, achievements, such as the fact that greenhouse gas emissions continue to decouple from economic growth, progress on implementing infrastructure projects of common interest in the power and gas sector, and the establishment of new fora to promote regional gas and electricity cooperation. It also highlights areas where specific Member States are falling short of key objectives, such as in the implementation of 2020 renewable energy, interconnection, and energy efficiency targets. These too are well known, although it is important to bring these things to light.
The Commission does not always confront the weaknesses of current energy and climate policy head-on. For instance, the projection that the EU will reduce its energy use by 18% by 2020 and is aiming for 27% by 2030 looks OK on paper. In reality these numbers sound more impressive than they really are because the EU still uses a baseline for energy-use that predates the economic crisis to calculate them. Unfortunately, this tends to call into question the seriousness of the claim that the Energy Union puts “energy efficiency first”.
Furthermore, the Commission’s general approach to innovation tends to treat it as a competitiveness issue, or as something that can measured by the number of patents and amount of expenditure on R&D. In reality, a more strategic approach to unlocking key gaps in our technological armoury to decarbonise our economies by 2050 is needed. The EU desperately needs to prioritise some technologies, such as in the area of storage, CCS, smart grids and breakthrough technologies for the decarbonisation of energy intensive industries. There is not enough evidence of this kind of strategic prioritisation in the SOTEU and related documents.
However, the SOTEU’s main intended purpose is clearly to set a broad political agenda and launch a new governance process around it, rather than to enter into technical details of implementation. The Commission clearly aims to start national policymakers thinking in terms of the five dimensions of the Energy Union. It also aims at building political momentum for the Commission’s upcoming legislative initiatives, by clearly laying out a policy narrative and the supportive evidence.
As the energy transition progresses, it will require increasingly important structural changes to national energy systems
One can also see the State of the Energy Union as becoming a key focal point of a new institutionalised “soft” governance process – modelled on the EU’s system of economic governance, the European Semester – that operates alongside the Commission’s legislative actions.
This strategy makes sense if one considers the circumstances in which the Commission is operating. As the energy transition progresses, it will require increasingly important structural changes to national energy systems. Thus there is a desperate need to get Member States to internalise and take ownership of the need for the Energy Union’s five dimensions and their role within it.
Furthermore, a significant group of Member States have clearly signalled that they do not wish to have legally binding targets for sector specific objectives – such as for renewable energy, energy efficiency, or interconnectors – but the EU’s objectives still need governing. The Commission’s approach therefore seems to be to get the ball rolling on a new “soft” governance mechanism that does not scare off Member States with too much legal obligation.
The need for “buy-in”
Nevertheless, a key challenge for the Commission will be to get the necessary “buy-in” from Member States to make the process work. While the Commission is clearly making a noble effort to establish a new institutional process to support the Energy Union, it also needs to get Member States to make their own commitments to deliver outcomes as part of this process.
There is a risk that Member States’ core contributions to the Energy Union will never get the necessary attention from domestic stakeholders, from regional partners, or even from high level officials
This is partly what the Commission’s proposals for new National Energy and Climate Plans are about, for which guidance was attached to the State of the Energy Union Communication. National plans that have been developed with domestic stakeholders are important for creating commitment. And as the Commission notes, only around one third of them have national energy plans until 2030.
However, if one looks the details of this guidance on the National Plans, one is struck by the fact that there is potentially a lot of detailed planning and reporting on everything from policies and measures to sectoral energy and emissions projections. But there is not necessarily a separate and clear place where each Member State lists its main two or three national commitments to contribute to each dimension of the Energy Union.
There is therefore a risk that Member States’ core contributions to the Energy Union will never get the necessary attention from domestic stakeholders, from regional partners, or even from high level officials in the political process to create commitment. Plans should have high level commitments and strategic objectives as a clearly distinguishable and separate component, so that this attention can be created.
Convergence of interests and long-term thinking
Making the Energy Union a reality will also require getting Member States to see their own interests reflected in its aims. This is easier said than done. In some important parts of the Energy Union project, there are clear conflicting interests between the EU’s collective aims and those of specific Member States, particularly in the short run. For example, phasing out Poland’s coal-fired power plants and mines would have significant social consequences for certain regions of the country (and is clearly a political minefield for any national government). Improving competition or interconnection capacity in electricity markets also requires overcoming vested interests in specific Member States.
The Commission still seems reluctant to ask Member States to do post-2030 planning in any concrete and meaningful way
In such cases, a combination of short term political pragmatism and a longer term strategic view is required. Short term pragmatism is required to continue to “move things forward” towards the end goal. But taking a long term view can also be a very effective way around short-term conflicts of interest. For instance, while the new Polish government does not want to close its coal plants immediately, it must also confront the fact that it risks being stuck with a power sector full of stranded assets unless it diversifies its energy mix more quickly.
The EU therefore clearly needs a place for Member States to think through and explain to their EU partners how they could potentially achieve their low-carbon transitions beyond just 2030, and the implications of different strategies they may adopt. However, despite the obvious need for this, the Commission still seems reluctant to ask Member States to do post-2030 planning in any concrete and meaningful way. Its guidance on the national plans, for instance, calls vaguely for a “perspective” to 2050 but without any articulation of what this would involve on a sector by sector basis. Thus, it fails to capture an opportunity to ask Member States to put their long term strategies on the table and get them thinking about their implications together with domestic stakeholders.
In many respects, the Energy Union is a clever attempt to try to save EU energy and climate policy from the general risk of a retreat from “more Europe” by the Member States. The State of the Energy Union has begun to define how this process will work. However, the work of getting political “buy-in” by the Member States convergence on a common vision of the end goal has only just begun.
Oliver Sartor is Research Fellow Climate and Energy Policies at the Institute for Sustainable Development and International Relations (IDDRI) in Paris.