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European Commission - Speech - [Check Against Delivery]

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

Brussels, 18 November 2015

Ladies and gentlemen,

Let me start by saying that I am very happy to see so many familiar faces here in the room. I had the pleasure to meet several of you during my Energy Union Tour, so I feel amongst friends here!

I am also happy to see that well-respected organisations such as the Cambridge Institute for Sustainable Leadership, E3G and the European Climate Foundation join forces to set up this event. I would like to thank you for your commitment and engagement, and for welcoming me on what is a very special day for the Energy Union.

Indeed, it is a special day. Today, we add a new instrument to our Energy Union toolbox, the State of the Energy Union Report, and I am glad to share with you the main findings and messages of its very first edition, which the Commission adopted just a few hours ago.

Nine months ago, the Energy Union Framework Strategy was generally well received, and it definitely added to creating a new momentum for Europe's energy and climate policy. It was about time!

But already then, it was obvious to me that even with this broad political support from across the continent, the Energy Union project could not be built in Brussels alone. Of course, Brussels can play an important steering role, but in the end, the Energy Union can only be built in the field…

  • in creative renewable companies, like the ones I visited in Sweden, met in Finland or Hungary;
  • in innovative companies that radically embrace the principles of the circular economy, like the one I visited in the Netherlands, Interface (and I am glad that its CEO, Rob Boogaard is here with us);
  • in the newly-established regional cooperation framework in Central and Eastern Europe, reaching out to the Western Balkans, and beyond;
  • in smart cities like Copenhagen or Vaasa, where energy is generated and consumed sustainably, and where the smart grids of the future are being designed;
  • in the renovation of residential buildings to make them more energy efficient, like in France, with the support of the Juncker fund;
  • in a dialogue with the social partners, who I met in Austria, Germany and Belgium;
  • it is built through European consumers who are assuming a new role in our economy by producing renewable energy on their roofs and in their gardens. Most of Germany's capacity of generating renewable energy, for instance, is already in the hands of private individuals.

This is why, last May, I launched the Energy Union Tour: to see what is happening on the ground. Since then, I visited 22 Member States, the rest will follow soon.

Each time, I met with representatives of governments, mostly at the highest level, the level of Heads of State or Government, which in itself shows the importance of the issue. I discussed with them how we see their Member States' performance in this field, and I listened to their plans and strategies for the years to come.

But I have also met with the many, many stakeholders, who are the backbone of the Energy Union:

  • the countless renewable companies, researchers, engineers and entrepreneurs who drive our transition to low-carbon society,
  • members of national parliaments,
  • civil society and social partners,
  • mayors and urban actors;
  • and of course thousands of conscious citizens who joined me in several citizens' dialogue.

Nearly every second visit I had, was with sustainable companies active in renewables, NGOs or representatives of national parliaments. More than half of my visits were with citizens engaged in academia and think-tanks. Every third visit on my Energy Union Tour was with regional or municipal stakeholders, to discuss our smart cities agenda. This really gave a good overview of what is happening all over Europe. It is through these exchanges and visits that we were able to put together the State of the Energy Union Report which we presented today.

So what makes it so special?

Of course, we are looking back at what has been done, not only in the energy field but across sectors and policy fields; transport, research, ICT, heating and cooling, etc. That's why I will not only present the State of the Energy Union to the Energy Ministers, next week, but also to Transport, Research and Environment Ministers.

But – even more important - we are also looking forward. To those policy measures that need additional political push, additional focus in 2016. Let me be clear: the State of the Energy Union is not about rewriting the Energy Union Strategy, on the contrary, its principles remain more valid than ever. The State of the Energy Union is all about giving political guidance for work to come, it is about giving clear political messages. There are 4 messages I would like to share with you.

First, the EU will continue to take the lead in the transition to a low-carbon economy and society, also after COP21. We are now just a couple of days before the negotiations in Paris start, and the European Union spares no efforts to make sure that Paris will be a success.

But there is not only a road to Paris, there is also a road from Paris. And also on that road, the EU should lead the way. For environmental reasons bus also because there is a business case for it: low-carbon policies lead to growth and jobs.

To continue EU leadership and to further move away from an economy driven by fossil fuels, we will:

1. create the conditions to ensure that we get the price signals right. Our proposal on the ETS reform is meant to do exactly that: to make sure that there is a carbon price that sends the right signal; the same goes for the market price signal, through the proposal on the redesign of the electricity market that we will make in 2016.

2. further develop our investment instruments, with a particular focus on the local level and on the energy efficiency of buildings, which are responsible for 25% of non-ETS greenhouse gas emissions. To that end, the Smart Financing for Smart Buildings instrument should see the light in 2016. This is one of the reasons why I also want to present the State of the Energy Union to the European Investmetn Bank next; to see how they can support the objectives of the Enegy Union.

3. Next year, we will also present a series of policy instruments - legislative and non-legislative - to make sure that we reach the targets that we set ourselves for 2030. In 2016, we have a historic opportunity to look at all initiatives together: our renewables legislation, our energy efficiency legislation, our GHG-emissions legislation, our integrated research, innovation and competitiveness strategy… They all interact with each other, so we should and will be coherent.

4. Finally, the transition to a low-carbon society means that we will have to further mobilise other actors, such as businesses (we need real 'Energy Union Business Ambassadors'), as well as cities, helping them to become true enablers of the EU’s sustainable energy and climate policies.

So all in all, we do have a good story to tell on the low-carbon economy (think about the decoupling of GHG emissions and GDP growth). And we will continue writing new chapters. That is the message I want to pass before Paris, in the State of the Energy Union.

Second, if we want this fundamental energy transition to be successful, it has to be socially fair and consumer-centred. Citizens have to take greater ownership of this transition; they should benefit from new technologies and from more competition and be more active in the market to get these benefits.

The report on consumer trends in the energy markets that we adopted alongside the State of Energy Union shows that from a consumers' perspective, energy markets are still not performing as they should. That we still have a lot of work in this field, for instance to increase switching rates, to turn energy bills consumer-friendly, and of course to reduce the number of energy poor who cannot afford to heat their houses and even get disconnected (in Germany alone in 2014, 350,000 households were at least temporarily disconnected from electricity).

Here too, we need concrete actions in 2016. We will:

1. facilitate demand-response and reward active participation in the market through a redesign of the electricity market, linking up with digital technology. Digital technologies have caused a seismic shift in modern consumer habits. We no longer buy, own, and stock everything we consume. That is a profound transition.

2. outline the components of energy prices, to create more transparency on energy costs and prices and hopefully trigger a debate on this issue.

3. work with European social partners and encourage Member States to equally engage with social partners at national level, to prepare and manage the energy transition;

4. stimulate the right skills for the jobs of the future; in the energy transition, some sectors will boom, others might get into difficult waters. We will therefore link up the Energy Union with the Skills Agenda that the Commission will adopt early next year.

5. ensure that the interests of energy poor consumers are duly taken into account in all pieces of legislation that we will put on the table in the coming months.

My third message has to do with geopolitics.

It's true, we have seen some progress (e.g. the Ukrainian-Russian agreement that is now being implemented). But geopolitical challenges will not go away, we should make sure that we are on top of them. We will therefore:

1. keep pushing for the diversification of energy sources, routes and suppliers, e.g. through an ambitious LNG strategy.

2. continue discussions with our partners, in particular those in our immediate neighbourhood. Discussions that should go beyond energy security in a narrow sense, but also address energy efficiency and the development of new technologies in renewable energy.

3. And we really have to speed up work on infrastructure projects. The procedures of granting permits or financing issues simply take too long. In that regard, we make some concrete proposals in the 2nd list of projects of common interest which we also adopted today. The list is better focused than in the past (going from 248 to 195 projects), and more aligned with the core objectives of the Energy Union (with more projects on electricity, facilitating the integration of renewables). As I said at the Infrastructure Forum that was created earlier this month: it's now a matter of better monitoring its implementation.

Last but not least, my fourth message. With this State of the Energy Union, we are laying the first building blocks of a ‘governance mechanism’ that will bring more transparency and predictability to investors and businesses. The low-carbon and energy efficient technologies are here. But they need investment. We need a governance mechanism that ensures that:

-       Member States develop reliable long-term strategies (currently, only one third of the Member States has such a long-term strategy);

-       Member States actively engage in regional cooperation, looking at where joint planning can bring more cost-effective solutions and avoiding negative effects on neighbouring countries;

-       reporting will be more streamlined, with less unnecessary administrative burden without undermining essential reporting obligations;

-       a mechanism that – in sum - ensures the implementation of the Energy Union Strategy in all its dimensions.

When ready, the governance mechanism will thus be based on three pillars:

1. the State of the Energy Union report that we launch today for the first time and that we will - in the coming years - further develop into a solid instrument, with country fact sheets and policy conclusions. That way, we will keep the implementation of the Energy Union under close scrutiny and we keep it regularly on the European agenda, through a discussion in the European Parliament and in different Council formations. It will also allow the European Council to give continued guidance on this issue.

2. National Energy and Climate Plans with biannual progress reports, covering all five dimensions and covering the 2021-2030 period. Today we provide first guidance (to be supplemented in 2016 with a template) and key indicators (to be used for the progress reports). Next year we will come with a proposal so that this monitoring and reporting system is firmly anchored in legislation. That way, we'll ensure that the European Parliament too will play its part in making the Energy Union happen.

3. the sector-specific legislation that I mentioned before, and that we need to underpin the implementation of the Energy Union Strategy as well as to ensure that we reach our 2030 targets.

I know that this is an ambitious project. But we owe its successful implementation to 500 million citizens in Europe and to our future generations. Therefore my promise to you today, as we are nearing the end of 2015, is that 2016 will be the Energy Union's 'year of deliver'!

SPEECH/15/6124


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