Maroš Šefčovič - Vice-President for Energy Union
President Caldeira, Chairman Fazakas, ladies and gentlemen,
Thank you for inviting me today and for making energy security the main theme of your conference. This topic could not be more pertinent in the current political and geo-political context:
- The upcoming COP21 conference at the end of this year will bring the world's governments to negotiate a historic agreement for fighting climate change.
- The ongoing conflict in east Ukraine has sent an alarming reminder to political leaders that our energy dependency is rendering Europe highly vulnerable to disruptions. As you might know, the EU is the biggest energy importer in the world, spending over one billion euros a day on its energy supply, with some of its Member States entirely dependent on single, sometimes dominant providers.
- It is in this 'climate', energy security has become a political concern at regional, national, and European levels. As you know, energy security is at the heart of the Energy Union, the third of ten priorities announced by President Juncker when he took office. It is key element in the European Council's conclusion from October last year, calling for concrete measures to reinforce security of energy supply (which was reiterated in the March conclusions). The European Parliament is also currently developing its own-initiative report on the Commission's May 2014 European Energy Security Strategy (EESS).
Before I go further into how the EU is tackling the challenge of energy security, I would like to recognise the role of the European Court of Auditors and to thank you for your contributions so far. Auditing EU expenditure is critical for ensuring that tax-payers' money is well spent, that financial management improves, and therefore in sustaining public trust in EU institutions. In this regard, I would like to acknowledge the ongoing performance audit on the security of energy supply, with which the Commission is engaging fully.
Energy security is one of the three over-arching objectives of the Commission's Energy Union strategy which was published in February. Our energy needs to be secure, but also competitive, and sustainable. Of course the three are inter-dependent and go hand in hand. In fact, energy security is a highly complex issue which involves action across various policy fields and decision-making levels. In a nutshell, in order to increase our energy security, we must:
- consume less by enhancing energy efficiency;
- rely more on our indigenous resources, especially sustainable ones;
- diversify our external suppliers,
- and integrate our energy markets into one where energy can flow freely.
Allow me to say a few brief words about each of these elements, and I'll be glad to elaborate further during our discussion.
The reduction of energy consumption is enshrined in the Efficiency First principle of our Strategy. It basically means that we will boost and grow our economy while decreasing our energy demand by becoming more energy efficient. It is therefore necessary that we treat energy efficiency as an energy source in its own right, representing the value of energy saved. As part of the market design review, the Commission will ensure that energy efficiency and demand side response can compete on equal terms with generation capacity. This will ensure we are on the right path to meeting the European Council's objective of increasing our efficiency by 27%.
With regards to our indigenous energy sources, ladies, and gentlemen, Europe is very rich with primary energy resources! We may not have much oil but have infinite access to the sun and wind. We also have the human capital to develop clean-tech technologies and become global leaders in renewables. That is why I have said in the past and I say it again: smart grids are Europe's shale gas!
Until we reach the day when we can rely more on renewables, we also need to diversify our suppliers of traditional energy sources. In that respect, we have been working on developing access to alternative suppliers in order to decrease existing dependencies on individual suppliers. These include the Southern Gas Corridor route, the Mediterranean and Algeria, as well as imports from our traditional partners like Norway, the US, and Canada. In Northern Europe, the establishment of liquid gas hubs with multiple suppliers is greatly enhancing supply security. This example should be followed in Central and Eastern Europe, and in the Mediterranean area, where a Mediterranean gas hub is in the making.
Finally, by allowing energy to flow freely across European borders, national energy grids will be able to rely on one another in case of disruption. That is why the Commission has published a set of measures to achieve our 10% electricity interconnection target and supports Projects of Common Interest (PCIs) with the highest potential.
Ladies and gentlemen,
I am sure it is no coincidence that you decided to tackle both Europe's energy security and the ongoing reforms in Ukraine. The two go hand in hand and, if you allow me, I would like to say a few words about the role of Ukraine in this respect.
Ukraine has been a major gas transit country between Russia and the EU for the several decades now and will remain so for the foreseeable future. In 2013, half of Russian gas imported into the EU was transferred through Ukraine. To a lesser extent, Ukraine has also played an important intermediary role when it comes to our oil trade. It is therefore a common interest for both Ukraine and the EU to ensure Ukraine has a modern and functioning energy infrastructure.
The Commission has been supporting the efforts to modernise the Ukrainian Gas Transit System as a priority investment project. Last year, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) signed a first set of loan agreements of €300 million to support the rehabilitation of the main East-West pipeline.
As of this year, Ukraine is bound to implement the 3rd Energy Package, in line with its obligations under the Energy Community Treaty which it joined in 2011. In this respect, I would like to welcome the Ukrainian government's efforts to move forward swiftly on deep energy sector reforms in general, and with regards to the gas sector and Naftogaz in particular. The short term effect will not be easy, and for this the Ukrainian government deserves a lot of credit. Ukraine is definitely on a new path since the aftermath of the Euromaidan Revolution, with the right political conditions to bring about real change.
Of course, there is still plenty of work to do when it comes to Ukraine's constitutional reform, justice sector reform and the fight against corruption, etc. But Ukraine's ambition and progress in implementing reforms will be key indicators for further political and donor support by the EU and foreign investors. It is therefore in everyone's interest to see this progress continue on the same path.
Finally, as you know, I've been chairing the trilateral talks between the EU, the Russian Federation and Ukraine on the implementation of the Winter Package. The Package addresses Ukraine's purchase of Russian gas but it also of major importance ensuring stable, sufficient and uninterrupted transit of gas to the EU. So far, we have succeeded in ensuring that the main elements of the Winter Package will be extended for the second quarter of 2015 and I am confident that we will achieve further progress. We will continue to work towards a bridging agreement until the Stockholm Arbitration Tribunal settles the disputed issues.
As you can see, the question of energy security is highly complex and multi-faceted. Whereas the EU is committed to decarbonisation and to diversifying of its energy imports, I remain convinced that Ukraine will and should continue to play an important role in ensuring Europe's energy security as a transit country.
Thank you very much.