Miguel Arias Cañete - Commissioner for Climate Action and Energy
Minister Reiznice-Ozola, Ministers, Vice-President Šefčovič, Excellencies, Distinguished Guests, Ladies and Gentlemen,
This morning the Vice-President set out a vision for the Energy Union. As Commissioner for Energy and Climate Action, I would like to outline how I believe we can get there.
But first of all, I would like to stress the foundations of all the work that I will be piloting over the next years, and that is the interests of Europe's citizens; their right to have secure supplies of affordable, sustainable, competitive energy supplies. And an energy policy that is a driver for jobs and growth in Europe.
EU citizens continue to strongly support dealing with climate change; our challenge is to craft an energy policy that will deliver a 40% CO2 reduction by 2030, but does so in a manner that becomes a motor for both competitiveness and energy security.
This is far from simple; but I believe that with resolute action the competitiveness – security – sustainability triangle can be achieved.
Let me start with the challenge of Energy Security.
Without decisive action, many Member States will remain dependent on a single supplier that does not view the sale of gas as simply a commercial issue. Furthermore, the EU will become more dependent on imports; for example the 10 BCM delivered via the Southern Corridor at the end of the decade will be offset by declining domestic production, unless the EU succeeds in developing shale gas.
I therefore see the need for concrete action, in a form that our citizens will immediately understand and appreciate.
I believe that we must be serious about reducing our reliance on Russia; Gazprom being the only supplier holding a dominant position on EU markets.
In addition to consolidating our relationship with our trusted partners such as Norway, we should increase imports from other suppliers, and commit to build the infrastructure in the EU to bring this gas to where it is most needed, in particular to ensure the rapid development of a liquid gas market and functioning gas hub in our eastern Member States.
But our energy security is not just about more diverse gas supplies; I therefore propose a 10-point plan to deliver a new European Energy Security Strategy:
- Revision of the Regulations on Security of Supply of Gas and Electricity: we already have a solid base to work on, as has been shown in the way the EU reacted to the Ukrainian crisis through stress tests, committing for example to rapidly ensuring reverse flow to assist the most vulnerable countries; we can use the experience gained to make further progress for the future.
- Acceleration of the PCIs and Connecting Europe Facility using the Juncker Investment Plan and Regional and Structural Funds: we have to make progress in ensuring that no part of the EU remains isolated or vulnerable, and that all citizens benefit from a competitive market. We have the tools in place in make this happen – and I am determined that we do.
- A new EU LNG Strategy, ensuring that existing terminals and those under construction provide the greatest possible benefit in terms of security and diversity of supplies – and thus competition – not just to the country where they are situated, but across the entire EU.
- Accelerating progress on a Mediterranean Gas Hub, and developing a Strategic Energy Partnership with Algeria; and at the same time committing to the infrastructure that will connect this new liquid market to the rest of the EU.
- A new strategic alliance with Turkey – this is central to our energy objectives, as Turkey will be a key gas transit route in the future.
- Strengthening the Energy Community: we have made great progress bringing these countries into the heart of the EU's energy market; we can do more to the benefit of all.
- A new strategic energy relationship with Ukraine – helping it modernise its energy industry and become a source of investment for EU companies.
- A new approach to speaking with one voice, with a greater level of ex-ante coordination on international energy issues.
- Ensuring Member State agreements are compatible with EU law, with a revision of the Decision requiring their notification. And finally:
- A Communication on promoting domestic resources– including progress on shale gas based on a European science and technology network on unconventional hydrocarbon extraction.
I am well aware that achieving all these priorities will be far from simple; but they are all vital components of a policy that guarantees security, but at the same time promotes greater EU competiveness through improved competition.
And it is these same objectives that will drive the next stage of development of the Internal Energy Market, where much remains to be done if we are to achieve my vision of a truly integrated market.
A citizen in one Member State must be able to buy his or her electricity freely and simply from a company in another; locally produced renewable energy must be incorporated easily and efficiently into the grid; prices for citizens must be affordable and competitive, and efficient long-term investment signals that will encourage sustainable and competitive supplies must be allowed to develop.
Whilst we have achieved much, and we have strong foundations to build on, this vision of an Internal Energy Market does not exist today, and without change, it will not happen tomorrow.
I therefore propose a four-point plan to get us there:
- The first priority is to fully implement the Third Package, to adopt and implement all grid codes and to put in place the necessary energy infrastructure. There is quite simply no justification for continued delay, and I will bring all Community instruments to bear to quickly finalise this.
- Second, all citizens must have a wider choice of suppliers, the chance of generating their own power, and robust consumer protection. In 21st-century Europe, energy poverty is quite simply unacceptable. Member States should address it, with the Commission helping identify best practice.
The Commission will adopt a strategy for this later in the year. Not least, the recent falls in oil prices will have an effect on gas prices, and we are already seeing the energy competitiveness gap with the US falling. These benefits must be passed on into citizens in terms of lower prices, and jobs and growth.
- Third, regional initiatives can produce very quick results, acting as a stepping-stone to a real EU market characterised by deep harmonisation, deep inter-operability and deep inter-connectivity. These initiatives must develop in parallel, and demonstrate important results by the end of next year, with the Commission helping promote common approaches, best practice and transparency.
- Last but not least, regional progress needs to be reflected in EU-wide progress. We must reassess the current institutional set-up, including the powers and independence of the ACER energy regulatory authority, ENTSO-E and ENTSO-G, along with the market design rules. The Commission will consult publicly and examine regional progress before proposing the necessary changes. A Communication on market design this year will launch this process.
On renewable energy, President Juncker has set us the goal of becoming – or remaining – world leader. To me this means becoming a global hub for developing and manufacturing the next generation of renewable energy technologies, and putting into place the policies that will be the example of how to catalyse an extraordinary expansion of investment in new, highly competitive clean energy; for this is what the 27% target by 2030 demands.
We have made great progress towards meeting our 20% target by 2020, but we have also learned a great deal. We must put this knowledge to use; creating a single EU market for renewable energy that is fully integrated with, and competes freely in, the overall electricity market.
A renewable energy market that rewards innovation and promotes efficiency. Once again, it must be a driver of jobs, growth, innovation and affordable and competitive electricity prices for our citizens and it must make an important contribution to improving our energy security.
The Commission will consult on and propose a new Renewable Energy Package.
ETS will remain the major instrument helping the energy sector to decarbonise. Heads of state underlined the central role that ETS should continue to play as part of the 2030 package they adopted in October. We must redress the imbalance on the carbon market urgently, so as to have again price levels that make a difference to investors.
That is essential. The short term job is to adopt the Market Stability reserve, and that – I hope – will happen in the coming months. The long term job is to review the ETS, for which I will make a proposal later this year. It is my firm view that good and solid prices on the carbon market will improve the market position of renewables.
By the way, the support for carbon pricing is growing across the world. When I see what China is already doing and planning, I am impressed. The same goes for Korea or California. An international climate agreement in Paris later this year, should only increase the spread of carbon pricing around the world.
Moderation of demand and energy efficiency are, to my mind, the areas that merit our greatest determination at EU, national, regional and individual level. It is true that energy we do not use is the cheapest, most sustainable and most secure energy we have.
The EU is already a world leader here; going forward, our energy policy should take "efficiency first" as its abiding motto. Before importing more gas or generating more power, we should ask ourselves: "can we take cost-effective measures to reduce our energy use that will also increase our competitiveness?"
Our framework of product standards, labelling and buildings codes has become the global gold standard in energy efficiency, and must remain so. Here again I see the need for a three-point initiative:
- first: a revision of the eco-design, labelling, buildings and energy efficiency directives, a new strategy on heating and cooling, and continuing leadership on efficient vehicles, including promoting electro-mobility;
- second: greater and more effective use of available funds, including the Juncker Investment Initiative and regional and structural funds. In this respect the Commission will promote a Smart Cities and Communities initiative and use the Covenant of Majors to its full potential; and
- third: the EU could do more to deliver all the potential benefits of improving the efficiency of buildings. Investments in insulation are amongst the most profitable for citizens and industry today. Most of the work here has to be done at national, regional and local level, but the Commission can play a strong role creating the ideal framework for progress, with a particular focus on the poorest citizens in rented accommodation and those in energy poverty.
Integral to achieving all our Energy Union objectives, will be success in research. Without a leading edge in research and technology, we will not be the world leader in renewable energy, and, furthermore, we will not deliver the energy efficient homes that will empower our citizens as energy consumers, build truly smart cities or maintain a leading position on more traditional energy technologies and efficient vehicles.
That's why, in my view, we need to act decisively on three fronts:
- First, we should renew efforts to build further on the successful Strategic Energy Technology Plan, with a limited number of essential priorities and clear objectives to be achieved. It must deliver more results in bringing together EU and Member State research along common goals, together with industry. In this respect the Commission will propose an upgraded Strategic Energy Technology Plan.
- Second, we need to make up lost ground on energy storage – a vital element of tomorrow's energy system.
- Third, EU industry consistently points out that it has more difficulty than its competitors in accessing risk capital, particularly in areas like PV development. We cannot afford to lose this race and the EIB, through the Juncker Investment Initiative, accepting levels of risk greater than the commercial banking sector will bear, must support our industry and turn our leading position in renewable energy into growth and jobs.
These are not simple solutions to achieve in practice; but the boldest and most important solutions rarely are.
This brings me, in conclusion, to our work on governance. The EU's leaders have clearly recognised the need for a new governance system as the very foundation stone on which the Energy Union will stand.
Achieving the Energy Union will require committed action at all levels of society, and a robust mechanism to bring together this action, ensuring that collectively we deliver on our goals, is essential.
Distinguished Guests, Ladies and Gentlemen,
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.
We – the EU, its Member States and regional and local communities – must fundamentally change and improve how we work together if we are to meet the ever more pressing challenges that our citizens and industry want us to address. Solidarity and collective action are principles that have underpinned our European project from the very outset. These same principles must guide us as we build our Energy Union together.