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European Commission - Speech - [Check Against Delivery]

Keynote speech for Vice-President Šefčovič at ACER Annual Conference

09 July 2015

Brdo, Slovenia

Agency for Cooperation of Energy Regulators (ACER) Annual Conference


Good morning ladies and gentlemen,

It is a pleasure to be here today at ACER's annual conference and I am delighted to see so many familiar faces in the audience. I have met and worked with many of you over the course of last several months during our preparation of the Energy Union. Many of you provided us with your suggestions for the Energy Union Strategy. It was endorsed by the European Council, warmly welcomed by many groups in the European Parliament and very well received by citizens and stakeholders. And all of you, whether you are a part of ACER, ENTSO-E or ENTSO-G, or from national regulators, TSOs, DSOs, or from the private sector, helped us to accomplish this!

But as you all know, identifying an objective and achieving it are two very different things! Now, almost 5 months after unveiling the Strategy, the time has come to present you with some concrete deliverables – and I think that everyone will be pleased when I say that we are transitioning from talking about the things that we need to do to actually doing them!

As you all know, the ultimate objective of the strategy is to bring affordable, secure, competitive, and sustainable energy to all Europeans. We have a vision to transform the European energy landscape and we have been working diligently to fulfil it! The first fruit of our efforts will be the Summer Package next week that will include the revision of the Emissions Trading Scheme, the new electricity market design, a new deal for consumers, and revision of the Energy Labelling Directive.

We have been preparing the summer package together with Miguel, who is going to tell you about it in more detail, but we found out one thing —we cannot fulfil this vision without a full support from member states, citizens, and all stakeholders. It cannot be a Brussels project.

 

Energy Union Tour

That is why we now bring the Energy Union to the Member States, to national parliaments and local mayors, to social partners and business representatives, to students and think tanks. The Energy Union needs to win over the minds and hearts across Europe. We cannot achieve our vision without the support from both the public and national governments.

In every country I visit, I discuss the implications and benefits of the Energy Union on the national market. We exchange views about opportunities and challenges in the field of energy, climate, environment, transport, research and competitiveness to complement the Commission’s analysis. So far, I had the pleasure of visiting nine countries and in all of them, we were warmly welcomed and offered their full support for our work in the future.

These dialogues, like the one I had this morning with Minister Gaspersics, will result in reliable, up-to-date country-specific analyses. Once finalized, these will be made public and will be part of the first State of the Energy Union that is planned for this fall. We are certain that both the Energy Union Tour and the State of the Energy Union will encourage politicians and the public to take ownership of this energy transition and help us move ahead.

 

Governance

But the Energy Union Tour is only one aspect of our so called governance efforts to implement the Energy Union. We currently envisage a system based on the following elements:

  • We will work with Member States, when they will prepare national energy and climate plans, a key instrument to translate the Energy Union goals in concrete national policies.
  • Second element will be streamlined and simplified reporting from both the Commission and Member States and regular involvement of the European Parliament and the European Council in the implementation process.
  • The third element will be strengthened regional cooperation.

 We are convinced that with this system we will develop an Energy Union that:

  • Ensures the implementation of the 2020 and 2030 targets on GHG emissions, renewables and energy efficiency agreed by European leaders. Reaching these targets is a precondition for Europe to become the # 1 in renewables and energy efficiency and a low-carbon society and economy!
  • Secures the completion of the internal energy market, deepens regional cooperation, and reaches the interconnection targets.
  • And one that provides long-term certainty and predictability to investors.

 

In the Energy Union, Member States must coordinate and cooperate with their neighbours when developing their energy and climate policies. Doing so, will help to ensure that those policies that should continue to be set at the national level, support commonly agreed objectives (such as the 2030 targets) and do not cause frictions between Member States or put up obstacles to market integration.

But sometimes, the only way to reach a European goal is to start with regional milestones. We hope that regional successes such as the Pentalateral Energy Forum, the Baltic Energy Market Interconnection Plan (BEMIP), the South-West High Level group or the South East and Central Europe Connectivity High Level group (CESEC) that meets in Dubrovnik tomorrow, will act as catalysts for cooperation in other regions.

 

ACER – overall regulatory environment in the internal energy market

And this cooperation should not stop in developing infrastructure; it should also involve regulatory energy issues. There will be impact on the regulatory triangle composed of the Commission, ACER, and ENTSOs.

We all know that the European energy system is undergoing an intense transformation with innovation at its core, consumers in the centre, and incumbents grasping for breath. It is a transformation for the better – but we need to ensure that regulatory environment keeps up with technology and market developments!

While both gas and electricity systems are changing, the electricity's transformation is more radical. In reaction to this, a quote by the electricity visionary Michael Faraday comes to my mind: "The beauty of electricity is that it is under law, and that the taught intellect can govern it." I know that we have this intellect that Faraday was referring to, so now we need to ensure that we use it to govern our new internal energy market.

As I mentioned at the beginning, many of you helped us to form our opinions on this issue so you know that we are in a complete agreement! We will aim to reinforce the role of ACER so that it can: first, carry out regulatory functions on the European level; second; oversee the gradual development of the internal energy market; and third, deal with all cross-border issues.

Together, we also need to envision how to reconcile and better coordinate the roles between ACER and National Regulatory Authorities so that they can implement the necessary network codes and are not hampered by regulatory gaps and different national regulatory frameworks. ACER could also be involved in regulation and overview of both wholesale and retail markets as their convergence is inevitable within the next decade.

In the meantime, I would like to encourage all of you to make further efforts in regards to cooperation with your neighbors. Many of Europe’s TSOs already co-operate both on a regional and on a pan-European level. They have proactively set up a variety of regional co-operation initiatives such as the central auction offices and several regional security coordination initiatives such as TSC and CORESO. These initiatives are already some of TSOs’ contributions to the Energy Union. Today, these regional initiatives already cover 74% of the EU population.

Replication of these interactions and further collaboration also among DSOs and between TSOs and DSOs would send everyone a strong message that we are moving towards a more pan-European regulatory environment in the new European energy market!

And don’t forget the bottom line— these regulatory efforts, while highly technical, will ultimately help European citizens and industries!


Conclusion

All of these new things might seem like a lot but the Energy Union is a mountain worth climbing. Why? Because this is a combination of very worthy political cause, combined with a strong business case, and with a direct benefit for all Europeans.

Ladies and gentlemen,

We are in the midst of a paradigm change for everything energy related, and I am very proud to be part of the Commission which brings it about. After the summer package, we will start preparing the next batch of initiatives that will include the Strategic Energy Technology Plan, security of supply in gas, the LNG strategy, and others. I will also be continuing my Energy Union Tour so that everyone takes ownership of our energy transition.

Thank you very much for your attention and I assure you that you will hear from us about the future of the energy regulatory triangle in the not too distant future.

SPEECH/15/5331

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