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European Commission - Speech - [Check Against Delivery]

Speech by Vice-President for Energy Union Maroš Šefčovič at the Energy Infrastructure Forum

Copenhagen, 10 November 2015

Minister Lilleholt, distinguished guests, ladies and gentlemen,

It is a great pleasure to be here. In fact, it is difficult to believe it was only in February this year when this Infrastructure Forum was envisioned as part of the key actions of the Energy Union Strategy.

Now, less than nine months later, we are gathered here today, some 200 high level representatives of the EU institutions, European governments, industry, civil society and other stakeholders. We are here with one objective: to advance the development of European energy infrastructure.

I would also like to take this opportunity to thank Minister Lilleholt and the Danish government for offering to host the Forum on a yearly basis.

Ladies and gentlemen,

The Juncker Commission took office with a promise to be different: to be big on big things, to focus on what matters the most and has a significant impact on the lives of Europe's citizens. The Energy Union was positioned as one of the top priorities of these 'big things', those which have the greatest potential for concrete benefits.

Why does it matter so much?

Because Europeans already enjoy the four famous freedoms of the EU: on the movement of goods, capital, services, and people. But when it comes to our energy we are not there yet, despite the clear added value to all.

We have made considerable progress to interconnect Europe. But completing the internal energy market:

  • will allow consumers to enjoy more competitive services and prices,
  • will provide the market with higher security of supply,
  • will allow us to enjoy the befits of cooperation and spill-over effects when it comes to energy efficiency projects and investment in renewables,
  • and will allow us to reach our energy and climate targets effectively, ensuring we are on track for decarbonisation.

That is why we put forward an ambitious Strategy, which cuts across all the dimensions I have just mentioned, with infrastructure being a major aspect.

I am very glad to report to you that in its short life, the Energy Union has already seen several concrete achievements when it comes to Europe's energy infrastructure. To name a few:

  • the Central Eastern and South-eastern European Gas Connectivity (CESEC) is a key initiative to ensure the creation of a truly cross-regional competitive energy market in Central and South Eastern Europe and to make it possible for every country to have access to at least 3 different gas sources. CESEC held its first summit in February and in July, the participating countries already put forward a rigorous implementation of the most crucial gas infrastructure projects.
  • In April, the Malta-Italy electricity Interconnector was inaugurated, bringing Malta's level of inter-connection from 0% to 35% and contributing to the diversifying Malta's energy mix. Having just visited Malta yesterday, I can share with you that this project is very well-appreciated by the government and the population, including the fact that the project was supported by the European Energy Programme for Recovery [EUR 20 million]. 
  • A new High Level Group to drive forward key energy infrastructure projects in South-West Europe was established in June. It is focused on breaking away the isolation of the region and building the missing cross-border links to better plug the Iberian Peninsula into the internal energy market.
  • Last month, Poland and the Lithuania signed an agreement to connect their gas pipelines, therefore ending the isolation of the Baltic region from the rest of continental Europe. This was also a project of common interest which enjoyed financial support from the Connecting Europe Facility [EUR 295 million]. The fact that all three Baltic countries, Estonia, Latvia and Lithuania, agreed to contribute to the costs in Poland - demonstrates the exceptional regional impact of this project.
  • Next month, the electricity interconnections between Lithuania and Poland and Lithuania and Sweden will become operational. These new power interconnections will make it possible for the Baltic States to fully participate in the Nordic electricity market. Similarly to their gas infrastructure, the Baltic countries will now enjoy integration into continental Europe.
  • In 2015, we also witnessed the doubling of electricity interconnection capacity between Spain and France. I understand Carlos outlined already the very specific nature of the project – a real technological breakthrough. This long-awaited power line across the Pyrenees is the interconnection that breaks all records: 65 km of buried high voltage cable lines and the first trans-European direct current link using innovative converter technology. After two decades in the planning, the project was made possible thanks to EU financial support of €255 million under the European Energy Programme for Recovery and €350 million under an EIB loan.

But there are still major interconnection links which are missing. Building these interconnections will require the mobilisation of efforts at all levels. The Commission is strongly committed to assist the Member States in the reinforcement of regional cooperation through the establishment of high level groups. This is in order to add a political dimension and to provide strategic steer and policy guidance towards the effective implementation of short term key projects.

In this respect, it is worth mentioning the reinforcement of the Baltic Energy Market Interconnection Plan (BEMIP), which is being widened in scope to cover all five dimensions of the Energy Union.

I understand that Ringolds gave an excellent overview of the joint efforts of the Commission and the Latvian Presidency to extend the scope of the BEMIP cooperation but I would like to note that since 2009 when it was originally launched, BEMIP provided very concrete achievements, such as the ones I've mentioned.

I would also like to mention the Northern Seas as a region with a tremendous potential for intensified regional cooperation. There is plenty of evidence of the significant welfare benefits of a regional, cooperative approach for the development of a North Sea energy system, combining grids, offshore wind, "blue energy" (wave and tide), storage, CCS and the optimisation of existing onshore capacity.

I have recently visited the concerned countries, namely Ireland, Belgium, The Netherlands, Sweden, Germany, UK, and France. I can tell you the potential is well-perceived and appreciated across the entire region.

We have been talking about this for many years, and the time has now come to make concrete progress on realising the necessary offshore grid. I therefore very much welcome the Dutch plans to prioritise the issue under their upcoming Presidency.

Of course being the largest energy importer in the world, our stake in infrastructure does not end at our own borders. We are very much concerned by the infrastructure which leads into the EU, such as CESEC which I mentioned earlier, the Energy Community but also the work on the Southern Gas Corridor which is also seeing progress.

In March I attended the opening ceremony of the Trans-Anatolian natural gas pipeline, known as TANAP. We expect that by the end of 2019 TANAP will be transporting 16 billion cubic meters of gas to Turkey and Europe from the Shah Deniz II gas field in Azerbaijan which contains one of the largest gas deposits in the world. 

I have mentioned some of our major milestones and achievements so far as well as the great potential which lies ahead. But let us not fool ourselves; there are also some major challenges ahead. Energy remains one of the most capital-thirsty sectors in Europe. Every year an investment of no less than €205 billion is needed in order to meet our objectives. Almost half of it is needed for investment in electricity generation capacities and reinforcing the grids.

The EU has made €5.35 billion available through the Connecting Europe Facility, which will certainly accelerate the implementation of the Projects of Common Interest.

But as you discussed this morning, the bulk of these much needed investments will be privately financed. Reviving investment in energy and most particularly in strategic projects around Europe is therefore one of the main priorities of the Juncker Investment Plan, which we launched in cooperation with the EIB.

The objective is to unlock additional investment of at least €315 billion over the next three years. And energy projects should be the largest beneficiary of the €315 billion that the Investment Funds will put into the real economy.  

But of course investment will only happen if the market conditions are right and the political landscape is predictable and reliable. Therefore, we want to redesign the electricity market, therefore we want to reform the Emission Trading System, and therefore we want to put all other legislative proposals on the table by the end of next year. This will allow Member States and the European Parliament to adopt all major pieces of legislation for the Energy Union before the mandate of this Commission expires. And let me add that this allow Member States to start working on national energy and climate plans early on to provide predictability to investors as soon as possible.

Next steps for the Forum

Ladies and gentlemen,

Following this very successful inauguration of the Infrastructure Forum, let me say a few words about the next steps. As I mentioned, thanks to Denmark's offer, the Forum will continue meeting on an annual basis. The next meeting is planned to take place already in June 2016 and it should focus on concrete deliverables on infrastructure development and financing:

  • We will need to work together on the improvement of the ten-year Network Development Plan process to make it more transparent and inclusive of all stakeholders.
  • We plan to develop joint European planning for network development for electricity and gas. This task, even though technical, is of utmost importance for detecting and addressing the bottlenecks which curtail the implementation of projects of common interest.
  • We also plan to work on public acceptance. Permit granting and public acceptance issues are concerns witnessed by all regions in Europe. I am sure that together, based on our common experiences and best practices, we will find ways to develop the much needed projects while positively engaging with impacted population.
  • Finally, we will need to work and further develop the transparency and effectiveness of our regulatory framework for infrastructures. I would like to take this opportunity and praise the regulators' and Alberto's Pototschnig work and efforts in this respect.

Next steps for the Energy Union

As you might now, today I am also visiting Denmark as part of the Energy Union Tour which I launched in May. I have been travelling across the Member States in order to explain what the Energy Union is about and what it means in the specific national context, and of course to listen to local and national concerns.

Having visited already 21 countries before Denmark, I can tell you that the question of infrastructure has come up across my meetings with the national governments and parliaments, with stakeholders and civil society, with citizens. Its importance to unleash the potential of the Energy Union is commonly accepted across the continent.

Of course the projects we are talking about need stable regulatory regimes as I said before. This is a high priority for us and one of the reasons for which we try to advance the legislative process as early as possible into this Commission's mandate.

In the coming months we will also come forward with a new gas Security of Supply Regulation focusing on strengthened cross-border cooperation between Members States as well as at regional level. We are also in the process of revising the rules on the transparency of energy related intergovernmental agreements (IGAs).  At the same time, we will also table a new strategy for LNG and gas storage, helping among others to focus on the necessary transport infrastructure linking LNG access points with the internal market.

The next milestone of the Energy Union, one for which we have been preparing immensely across the services – is coming up next week: on 18 November I will present the first annual State of the Energy Union report. The Report takes into account the Commission's analysis of the situation of each of the Member States with regard to the Energy Union objectives and will contain some policy conclusions.

Bringing this entire data puzzle together, we can now present a coherent picture of our progress towards Europe's targets, and identify the remaining gaps at national, regional, and European levels. The second list of Projects of Common Interest will be adopted the very same day.

As you can see, the implementation of the Energy Union Strategy is keeping us very busy and 2016 will see the greatest bulk of legislative proposals being tabled. Your discussions yesterday and today, which I understand were very constructive, will definitely feed into this process.

Ladies and gentlemen, thank you again for coming to Copenhagen and thank you Christian for your government's engagement. I will see you all again here next June!


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