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European Commission - Speech - [Check Against Delivery]

Speech by Vice-President for Energy Union Maroš Šefčovič at the meeting with local stakeholders, academia, representatives of public and regional authorities, Klaipėda University, Lithuania

Brussels, 23 February 2016

Minister Masilius,

Mayor Grubliauskas,

Rector Eimutis Juzeliūnas,

Ladies and gentlemen,

It is a pleasure to join you here today to discuss the Energy Union and what it can bring to Lithuania. Whether you're here today out of intellectual, professional, or personal interest in the topic, I believe that the presence of each person in the room today contributes directly maintaining a substantive discussion on the EU. This is part of our democratic model of which we should all take ownership.

It is our responsibility to bring the discussion from Brussels to the Member States, to the cities, to the stakeholders who will be impacted by the decisions. And I very much appreciate it when citizens assume their responsibility to join and shape such debates. That is why I have been touring the EU since May in what I call the Energy Union Tour, which I will tell you about in a moment.

The choice of holding the discussion about Europe's new energy market here in Klaipėda was also quite natural given the central role of this city in the regional gas trade, which I will talk about in a moment. As I'm sure you know, this city is not new to trade; being an ice-free port, Klaipėda has been involved in maritime trade since as early as the 13th century.

And it only made sense to come to this beautiful university which has set itself the ambitious mission of becoming a centre of excellence in marine sciences to the benefit of the entire region. I was quite impressed by your selection of degrees such as BA in Maritime Transport Energy Engineering, Sea Ports Engineering, MA in Marine Environment Engineering etc. I am sure that your students can gain significant experience by their presence here, at what is becoming a major regional hub, and that they will be able to contribute to further develop this emerging economic activity, once they graduate.

But before we speak about what the Energy Union can offer to Lithuania and the Klaipėda region, let me say a few words about the Energy Union is all about.

Ladies and gentlemen,

As you know, the current Commission took office with a promise to be different, to focus on big things and on big things only, to tackle what matters the most to European citizens.

The Energy Union was therefore high on President Juncker's list of Priorities from the very beginning. Put simply, the current situation is no longer sustainable in any sense of this term. To give you some examples:

  • Our energy supply is not secure enough and our use of it is often highly inefficient. In this part of Europe you are even more exposed to the risk of disruptions.
  • Climate change is manifesting its devastating effects all around us and a joint action is indispensable. The successful result of the recent Paris Agreement was the result of tremendous work of all parties, and to a large extent of the EU. But the challenge of delivering on this Agreement is still ahead of us.
  • Decarbonisation is therefore not only the call of the hour but it requires a deep transition of our entire common market. This includes rethinking manu-facturing  cycles, infrastructure, innovative technologies, etc.

As you can see, such questions do not only require coordinated action among many countries and decision-making levels; they also require coordination among many different policy fields which traditionally were not always put together. These include: energy, climate, transport, agriculture, research, employment, education, finances, etc.

For this reason, this Commission decided to address these fields jointly by bringing all respective commissioners to work collectively as one project team. This entire project is what we mean when we speak about the Energy Union.

The overarching mission of the Energy Union, which I am in charge of, is to ensure all Europeans have access to secure, competitive, and sustainable energy.

We will achieve these objectives by building an internal energy market where energy can flow freely across borders; where we decrease our energy consumption by investing in efficiency and treating it as an energy source at its own right. By ensuring that the energy that we do consume comes from diverse sources and resources; where renewables have a major share thanks to research and innovation.

Exactly one year ago (tomorrow), the Commission presented a Strategy which elaborates on how we intend to deliver on each of these fronts.

But this Strategy was only the start of a decisive process, setting the vision. In the past year since then, we have been transforming the strategy into concrete actions. In fact, our timeline is almost as ambitious as our targets as we would like to present almost the entire legislation proposals by the end of this year, three years ahead of the end of our mandate. This is in order to ensure the EU co-legislators, namely the European Parliament and the Council, have enough time to adopt them still during this term.

Ladies and gentlemen,

As I mentioned, the transition we are putting in place is deep and extensive, requiring involvement of many stakeholders across the EU. That is why it was very important for me to visit each of the Member States and to convey, in person, the implications of the Energy Union on each and every country. Of course this process also allows me to speak with the local stakeholders and listen to their/ your concerns and priorities.

During my visit I take stock of the advancement of each country towards our common European objectives in order to ensure we address the remaining gaps at the European level based on the reality on the ground. Finally, I try to find best-practices in each country so that we can better learn from each other's experience.

In fact, in the case of Lithuania, I already started the bilateral discussion with your government when I met with Minister Masiulis last year and shared with him our analysis of the Lithuanian market and how it could benefit from the Energy Union.

My visit to Lithuania yesterday and today was an opportunity to follow up on last year's discussions and to hold similar meetings with President Grybauskaitė, Prime Minister Butkevičius, and Members of your national parliament.

In all these discussions, I told them how impressed I was with the tremendous progress that Lithuania has been making recently, connecting its infrastructure with your neighbours and therefore with Europe's internal energy market.

In fact, the interconnection of Estonia and Finland through submarine power cables, which we know as Estlink 1 and Estlink 2, as well as the LitPolLink between Lithuania and Poland and Nordbalt between Lithuania and Sweden – make the electricity isolation of the Baltic Sea region a matter of the past. Interconnection is finally above the 10% threshold, which is the target we set for all Member States.

Of course from a European perspective, LitPol Link is a major milestone as well: it is the very first connection with the European Continental Network. It is therefore another step towards a fully inter-connected continent, where energy can flow freely, where countries enjoy access to various energy sources, and consumers can choose between from range of suppliers.

But there's more. The connection of the Baltic countries to continental Europe is a milestone on the way towards synchronisation with the Continental European Network and de-synchronisation from IPS/UPS. I know that you, Lithuanians, and Baltics in general, are European at heart; soon your electricity will follow the same European heartbeat…

The Commission is actively supporting this process and wants it completed as soon as possible.

I am very glad to say that this success at ending the energy isolation of the Baltics is, to a large extent, due to the Baltic Energy Market Interconnection Plan initiative, the so-called BEMIP, under which all these interconnection projects were identified as priority projects, and they received significant grants (around €30m for LitPol Link, around €130m for Nordbalt).

My visit to Lithuania was also a chance to see with my own eyes the LNG Terminal "Independence" which Minister Masiulis had the courtesy of showing me this morning. Let me say that this terminal is nothing less than a breakthrough! Thanks to its construction, LNG volume to Lithuania is expected to triple this year and for the first time in history, the amount of Norwegian gas will surpass that coming from Russia. This could be a game-changer for the regional gas market.

But here again the significance of the port is not only for Lithuania but constitutes a major strategic contribution to the entire region and our attempt to bring new (low-carbon) sources into our system.

As you might know, last week was a major milestone for the Energy Union as we presented the second legislative package of the Energy Union and the first for this year. I will not go into all its elements but we named it the Security of Supply Package because of its focus on energy security in general and gas and LNG in particular. One element of the package was a new EU LNG Strategy which specifically refers to Klaipėda as a best practice example - having improved energy security and price competitiveness not only for Lithuania but also for its neighbours.

Another aspect, on which I complimented your government, is the energy transition and decarbonisation. Lithuania met its 2020 targets for renewables already back in 2013 and we expect it would also meet its 2020 greenhouse gas emissions target. As I'm sure many of you know, President Grybauskaite was a true ambassador for the energy transition in this year's World Economic Forum in Davos where leaders from all over the world heard from her how over half of Lithuanian electricity and heat production comes from renewable sources. I agree with President Grybauskaitė that this is definitely something to be proud of!

But apart what's already been done and implemented, I would like to talk about what can still be done and how the Energy Union can assist Lithuania and the Baltic region along the main dimensions of the Energy Union:

Energy Security: There is room for further diversification of gas sources, suppliers and routes which would further reduce Lithuania’s dependence on gas supplies from Russia and will contribute to the further decrease of gas prices. The GIPL gas pipeline to Poland will help achieve that.

Internal energy market: The development of cross-border connections for both electricity and gas can further strengthen Lithuania's energy security and competition on energy markets. We can also see further use of the Klaipeda terminal once transmission infrastructure in the region is further developed and the Latvian gas market liberalised

Energy Efficiency: The Energy Union puts in places financial instruments to increase investments in energy efficiency. This is particularly significant in the buildings sector where Lithuania has a large potential for improvements. The heating and cooling Strategy which we also published last week addresses specific ways to ensure we can reach pleasant temperatures indoors without inflated energy bills and without leaving an unbearable environmental footprint.

Research and innovation: The new strategy for Research and Development will help Lithuania make investments in the R&D system which is currently undeveloped and to successfully implement the smart specialisation strategy. This could be particularly interesting for some of the people in this room who are academics and researchers in the fields of renewables, new storage solutions, etc.

As you can see a lot is being done, here in Lithuania, across the Baltics, all over the EU in our attempt to create an internal energy market which is sustainable, secure, and competitive. A lot more is still to be done and as I mentioned most of it will be done still this year. 2016 is therefore the Energy Union's Year of Delivery. I invite you to keep following and engaging yourselves in the discussions as we put forward the next legislative packages throughout the rest of the year.

But let me stop here as I am sure you have questions and comments. Personally, I am very interested in what you, residents of this region which is in full transformation, have to say about the project. I would like to know how you envision the energy transition here in Klaipėda, in Lithuania and in the rest of Europe.

Thank you very much.


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