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February 5, 2019
February 5, 2019
President Malosse, Distinguished Members of the European Economic and Social Committee,
It’s a pleasure to be here. I understand you will hold some very interesting discussions with some of my colleagues from the College over the course of this two-day plenary session; and I am very glad to be among them. In fact, I have been waiting to come and exchange views with you for a while, especially since the adoption of the Energy Union in late February so today’s exchange is very opportune.
I believe everyone in this room is familiar with the basic concept of the Energy Union: In order to provide Europeans with secure, competitive and sustainable energy, there are a series of actions we must take. They consist of:
- securing our supply through solidarity and trust;
- a fully integrated European energy market;
- putting energy efficiency first;
- decarbonising our economy;
- and staying ahead of the curve by investing in research, innovation and competitiveness.
That is the vision which was translated into a concrete strategy in a great teamwork exercise. The strategy was conceived first and foremost by an excellent team of Commissioners. But contributions and ideas came from the entire spectrum of stakeholders at all levels. I will speak in a few moments on how we intend to continue this crucial dialogue in the months to come.
Ladies and gentlemen, the Energy Union is a ‘triple win’ strategy because it will benefit our citizens, our economy, and our environment. The three go hand in hand in making Europe a better place to live. Allow me elaborate on the impact of the Energy Union on each of these main three pillars of our society.
In its very essence, the Energy Union empowers citizens.
First, we are addressing the fact that household consumers have too little choice of their energy suppliers and too little control over their energy costs. An unacceptably high percentage of European households cannot afford to pay their energy bills. One of the solutions is a market structure which is more competitive.
This means ensuring energy can flow freely across our borders so that consumers have access to more suppliers and can choose the best service and price. In order to get there, we will need to remove obstacles to cross-borders energy flow such as missing infrastructure or regulation which is inconsistent or unstable. The recent initiatives to accelerate market integration of the Iberian Peninsula and of Central and South-Eastern European gas markets are major steps in that direction.
But we are not stopping there. Citizens are no longer passive consumers. They are becoming ‘prosumers’ – consumers who can also produce energy and supply it into the energy grids. This will allow individuals to generate revenues from their private energy production but more importantly; to benefit from lower prices of energy produced by others. With smart grids in place, a sunny day in Lisbon should lower energy prices in Madrid; and a windy day in Budapest should lower energy prices in Vienna. It might take time but we are already seeing major advancements in this field!
By mid-year we will present our first ideas on a new electricity market design in order to:
- better integrate renewables into the grid;
- ensure national interventions do not distort the market;
- and increase competitiveness with the aim of reducing prices.
This will be followed by legislative proposals in 2016.
We are already providing citizens with information on the energy efficiency of their electric appliances – but we would like to do it better. We will therefore review the Energy Labelling directive, as well as other legislation on efficiency of buildings and transport.
Finally, with the mandate Vice President Katainen and myself recently received from President Juncker, and with a group of Commissioners in our task force, we are elaborating a strategy on Smart Cities. This strategy will ensure that the urban regions, where the vast majority of the Europeans live, make smart use of the latest innovations to make our cities more resilient and sustainable.
When it comes to the impact of the Energy Union on our industries, let’s first look at Europe’s renewable energy sector. This industry currently runs a combined annual turnover of €129 billion and employs over 1 million people. EU companies have a share of 40% of all patents for renewable technologies. The challenge is to therefore retain Europe’s leading role in global investment in renewable energy.
Last week, I met in Hannover with the Prime Minister of India who is eager to provide renewable energy to some 300 million citizens who currently don’t have proper access to electricity. He came to Europe in order to see where India can cooperate with European companies. The potential for our industry is therefore huge. And that is just one example…
But the energetic transition is not only about the energy sector; the change we are bringing about will benefit all industries. As you know, current wholesale gas prices are still more than twice as high as in the US. This reduces the competitiveness of our industries, especially those which are energy-intensive. And as if it’s not enough that we pay higher prices, we are also highly dependent on too few dominant suppliers, making us vulnerable to disruptions and price distortions.
In that respect, I assume you all heard Commissioner Vestager’s announcement, a couple of hours ago, about the Commission’s Statement of objections against Gazprom.
The solution we are putting in place is diversification of our energy sources; this means diversifying who we buy our energy from, which primary materials we use to produce our energy, and the technologies we put in place. When it comes to gas, we will
- develop an EU-wide strategy for LNG and storage;
- establish partnerships with additional suppliers;
- and build the infrastructure to bring the gas from those suppliers.
One example to that is the Southern Gas Corridor which is a strategic project to bring gas from Central Asia.
In fact, reducing the energy costs of our industries will create a virtuous cycle. By spending less money on their energy costs, European companies will become more competitive on the global market and will be able to invest more in their research and innovation. This will allow them to adapt to the new emerging sectors and create new innovative solutions for the energetic and economic transition. That, in return, will again reduce our energy prices so the cycle continues!
This Commission will support this cycle at various points. For example, Energy research funding has already been doubled under Horizon 2020 and will now propose an upgraded Strategic Energy Technology Plan to focus on the areas with the most potential.
The third winner I would like to talk about is our environment. Ladies and gentlemen, history will judge us for what we managed to do about global warming. Not only us, decision makers in the EU, but our entire generation. This is our last chance to stop climate change!
That is why the Commission welcomed the concrete commitments of Europe’s leaders to fight climate change. As you remember, last October the European Council endorsed binding EU targets by 2030:
- to cut greenhouse gas emissions by at least 40%;
- increase the share of renewable energy to at least 27%;
- and improve energy efficiency by at least 27%.
We are now translating these targets into concrete legislation, such as the revision of the Emission Trading System (ETS), of the Energy Efficiency and Renewable Energy Directives.
This shows you that this Commission is not only concerned with results it will see during its current mandate; it is looking at long-term solutions for our foreseeable future. In the short-run, our ambitious targets put us in a position to ask our global partners to be at least as bold in their targets. This is instrumental in our preparations to the COP21 conference in Paris at the end of the year. I deeply hope the international community will reach a viable agreement during this conference and I will ensure Europe takes up its role as a global leader during this crucial summit.
Over the past two months, I have presented the Energy Union Strategy at numerous occasions across Europe. So far reactions were very supportive. They came from the European Parliament, national European leaders, major industries and civil society organisations. Even outside of Europe, there are great expectations from what the Energy Union can deliver to the world.
I know you are very interested in the governance system and I think you are right. This is a key element in making sure policies are implemented and that ideas become reality. That is why the Commission is currently analysing the impact of the Energy Union on each Member States, identifying particular opportunities and obstacles.
In the coming weeks I will launch my Energy Union Tour where I will discuss our findings with national governments, industries, civil society organisations, and citizens. In this exchange, I will listen carefully how our findings resonate with them.
By the end of this year, the Commission will present the first “State of the Energy Union”, which will analyse the remaining gaps in each of the Member States and across the EU for making the Energy Union a reality. This will allow us to prescribe concrete solutions in the most constructive and transparent manner.
In fact, transparency is the key element of the entire process I just described; I will ensure we keep communication channels open so that relevant stakeholders are heard and that policy is coherent across all levels; European, national, regional, and municipal.
I therefore welcome your explanatory opinion papers on the Energy Union – the one you will adopt tomorrow as well as those which are foreseen for summer. These will provide an important input to this debate. So far, from what I have seen in your explanatory opinions, I believe your thinking is very well in line with the Energy Union strategy and I hope that we can work further on this basis over the next years.
Thank you very much!