Thursday, 13/8/2020 | 2:01 UTC+0
Libyan Newswire

Closing speech – Conference on EU Energy Policy and Competitiveness

Miguel Arias Cañete – Commissioner for Climate Action and Energy

Brussels, Conference on EU Energy Policy and Competitiveness

Ladies and Gentlemen,

First I would like to thank the organisers for giving me the possibility to close this very important conference on the future of EU energy policy with a couple of remarks from my side.

Vice-President Šefčovič and the other distinguished speakers in this Conference have analysed in depth the role of energy as a key priority for the EU and for the European Commission for the next five years. Let me recall the main reasons why energy will be at the heart of the political agenda for the new Commission:

  • Energy is a powerful instrument for job creation with a great potential for stimulating growth in the real economy, in particular in the area of renewables and improving energy efficiency in the buildings sector. Energy is also key for EU competitiveness – currently, price differentials with US gas prices are a challenge to Europe’s competitiveness in some sectors.
  • Energy is key for our security. We face today in Europe the urgent need to strengthen our resilience to supply disruptions. The situation in Ukraine has highlighted our vulnerabilities and the need to improve security of supply. Diversification of routes and suppliers is key in order not to be at the mercy of individual suppliers. Let us not forget that there is no security without energy security.
  • Energy is also key for sustainability. The EU targets for 2030 – at least 40% emission reductions, 27% renewables and 27% energy efficiency – represent some of the most ambitious targets to achieve a more sustainable energy system and can serve as a model for other parts of the world. From our perspective, this agreement is an important step towards a conclusion of a global climate agreement next year in Paris. It confirms that the EU remains the global leader in combating climate change.

Now, let me address first energy security.

Energy security is an immediate challenge – as demonstrated by the current ongoing crisis in Ukraine. Today, Europe is vulnerable in terms of energy dependence and relies too heavily on fuel and gas imports. Let me quote some facts:

  • The EU imports 53% of the energy it consumes. We are the biggest energy customer in the world and that costs us € 400 billion a year.
  • Some countries are particularly vulnerable, especially the less integrated and connected regions such as the Baltics and Eastern Europe. The recent stress test exercise has sown this quite clearly.

Now more than ever, we need to speak with one voice to lay down a more assertive European Energy diplomacy. If we want to be serious about the project of creating a real Energy Union, we need to significantly improve our cooperation and build a relationship based on solidarity and trust. Concretely this means:

  • We need to better coordinate our messages toresist undue pressure from third countries and to avoid market distortions. As agreed by the October European Council, Member States should duly inform the Commission on intergovernmental agreements with third countries in the field of energy, and seek its support throughout the negotiations.
  • Increase cooperation with our neighbours with a view to better integrate their respective markets. Let me emphasize the importance of the Energy Community, including Ukraine, in this respect, but also of our Mediterranean neighbourhood with which we should build a Euro-Mediterranean energy bridge. Solidarity should not stop at the EU’s boarders.
  • Explore common purchasing of gas to give more weight to our role as a major energy customer. Of course we have to respect the competition and WTO rules.
  • Strengthen the policy coordination among us: no Member State should modify its energy system without prior consultation of its partners and without analysing the potential consequences on their systems.

A further important element is the diversification of supply both as regards routes and energy suppliers. We should work intensely on the Southern Corridor to get Caspian gas to Europe. We must further develop our partnership with Norway, promote the project of the Mediterranean gas hub, including developing energy cooperation with Algeria. Moreover, the development of LNG terminals opens new possibilities of imports.

Ladies and gentlemen, there is no energy security without a fully functional and completed Internal Energy Market. The European Council recognised the urgency of achieving a fully functioning and connected internal energy market. The Italian Presidency is rightly insisting on the necessity of a completed internal energy market.

As a major energy market with half a billion consumers, an integrated and transparent internal energy market will be the backbone of the Energy Union.

In concrete terms, completing the internal energy market means that we have to work on two fronts:

We need to complete the common set of rules for the internal market to ensure remaining regulatory barriers to a well-integrated market are removed. This means engaging with regulators and stakeholders at national and EU level to fully implement and expand the existing legal framework where needed, including rapid adoption of the key network codes. We also need to promote common and market based approaches both for support schemes for renewables as well as, where needed, for capacity remuneration mechanisms, thus ensuring a fair market. Increasing competition should help drive down the costs for citizens and businesses and boost growth. We will also look into the possibility to further promote regional approaches in this context.

But we also need to complete the “hardware”. This means identifying gas and electricity infrastructure projects on which we can focus and building the missing interconnections of our energy networks. The European Council agreed on achieving the 10% electricity interconnection target by 2020 with the objective of arriving at a 15% target by 2030. This means that we need to increase substantially the cross-border exchanges between Member States, between the North and the South, the East and the West of Europe and overcome the existence of “energy islands”. I want to underline that we cannot accept that some Member States such as the Baltic countries or Portugal and Spain remain virtually excluded from the European grid. We are taking concrete steps to overcome this situation. The Commission is in the process of adopting a decision to allocate €647 million from the Connecting Europe Facility to 34 key energy infrastructure projects.               

This is an important step towards increasing investment in energy infrastructure. But more is needed. We need to focus on priority projects in the fields of generation, transmission and distribution, storage as well as efficiency and measures enabling demand response. To respond adequately to these needs, we have to facilitate private investments and provide a stable and predictable planning framework. In addition, we should mobilize all available public funds and develop new financial capabilities and instruments where necessary.

This leaves me to my third and last point: The EU Investment Plan

President Juncker announced a €300 billion plan for additional public and private investment in the European economy. This plan comes at a time when we are faced with a post-crisis downward trend in investment volumes which is not sustainable. Investment in the energy sector must increase.

The energy sector will clearly take a prominent part in the EU Investment Plan. Accelerated investments in energy will boost jobs and growth in the short and medium term. For instance, the construction sector starting with public buildings (hospitals, schools and universities, social housing for example) can benefit a lot from investments that could help save energy. Moreover, energy infrastructure, renewable energy and energy efficiency are priority investment areas where mature projects can be easily identified.

I am therefore glad to say that we are well advanced in our work on establishing an ambitious investment plan for jobs, growth and investment that could be adopted by the Commission over the next weeks. It will be instrumental to trigger a major investment push in a number of sectors, including energy. For this we need to mobilise funds from different sources, including the European Investment Bank and the private sector.

Let me also stress significant amounts of money are already available for investment in the energy sector from EU funds – the European Structural and Investment Funds, Horizon 2020 and the Connecting Europe Facility. One of our main challenges will be to make sure that these EU funds are quickly and efficiently used and will allow to leverage private investment to address the huge energy investment needs.

From my side, I can assure you that I will be ready to work with the Member States to bring about the conditions necessary for investment decisions and to ensure that the EU can act as a catalyst for public and private investment.    

Let me conclude by stating our intention to give priority for the coming years to the construction of a resilient Energy Union with a forward looking climate change policy.

We have to bring EU integration and cooperation in the energy area to the next level, building on the sense of urgency to avert short-term supply shortages, but also on the positive momentum created by the agreement on the 2030 Framework for climate and energy.

The Energy Union must be a political project based on solidarity and trust between Member States and a partnership between Member States and the EU. All three objectives of Energy policy, security of supply, competitiveness and sustainability should remain the guiding principles for our future work on building the Energy Union.

As a next step we intend to come forward with a strategy paper setting out details on the Energy Union during the first quarter of 2015 where we will present further details on key actions to be undertaken during the next two years.

In all this, let me stress that Member States will of course have to play an important role to make sure that we all together achieve the goals of the Energy Union. We therefore count on a strong political commitment from Member States to work together on the Energy Union, based on the agreement reached in the European Council in October.

Ladies and gentlemen, we had a fruitful discussion today. The results of today’s conference constitute already the first input to the wide consultation process we are engaging on.