Driving the EU forward: the Energy Union

It is a great pleasure for me to be part of the CEPS Ideas Lab 2015 on “More or less Europe?” which is now coming to a close.

CEPS Ideas Lab has only existed for two years, but it’s already a major success. A global reference in terms of high-level participation and the range of issues addressed. I see that our most pressing challenges have been discussed at length: the digital economy, our strategic relations with major partners, human rights and security, today’s financial markets, the jobs, growth and competitiveness challenge, and last but not least the energy and climate agenda.

I also very much welcome the setting into place of CEPS Energy Climate House – we need such venture to sustain momentum on the important energy and climate challenges ahead of us.

This cross-fertilisation is key to the development of the European project. We must engage all stakeholders – academia, business, civil society, opinion leaders and policy-makers – in discussing and shaping both the direction and the policies of the EU.

We must not be afraid of criticism. Political leaders should openly debate, explain, and most importantly deliver.

It is with this spirit that I would like to address the Energy Union project.

It coheres very well with the central theme for this year: “more or less Europe”?

As you know, this European Commission is very committed to be “big on big things and small on smaller things”

The President of the Commission, Jean-Claude Juncker, has identified 10 priorities areas for the Commission to invest politically. They very much correspond to the topics addressed in the “Labs sessions” and “Prime talks” that you had over the past two days.

These priorities are areas where the EU added value is ascertained. And where we can deliver.

This also means that we – at EU level – should not meddle in everything. We must notably respect the principles of subsidiarity and proportionality. We must be courageous enough to say “no” wherever justified … so as to focus on the core issues.

The Energy Union is one of the core priorities of this Commission

The Framework Strategy on the Energy Union was adopted only two days ago.

It is emblematic of the new ways of working of this Commission:

It is the result of intense work on the part of the team of Commissioners that I coordinate and steer – what we call the project team. 14 Commissioners – all contributing decisively to this new holistic approach.

Why “holistic”? Because the Energy Union is not only about energy and climate policy, it also integrates transport, research and innovation, industry, regional, trade, consumer protection, the digital economy, agriculture, employment and more. This strategy integrates all these important policies into a cohesive framework.

Now coming back to “more Europe” and the level of ambition on this “big” project. I have said that this is undoubtedly the most ambitious European energy project since the European Coal and Steel Community, some 60 years ago. It has the potential to boost Europe integration the way Coal and Steel did in the 1950s and it reminds citizens and our companies of the great potential of the single market.

Our strategy brings an important message to every European household and every European business: Europe is serious about a fundamental energy transition – an energy transition

  • that is just and fair
  • that will deliver affordable, secure, competitive sustainable energy to all.

We see this shake-up of our energy system as a ‘triple win’ strategy: it will benefit citizens, businesses, as well as our environment.

We aim to create an energy market that is

  • economically sustainable for our citizens and competitive companies
  • socially inclusive for our consumers and workers
  • sustainable for our climate, our air and our water

How? And what is new ? – will you ask.

Let me highlight four main features of the Energy Union:

First, the solidarity clause.

The Energy Union, like the European project itself, is based on trust and solidarity. Over the past decades, building upon the Coal and Steel Community, Member States have come to rely on each other in numerous fields. It’s time we apply this principle also to our energy markets. Member States should in all circumstances know that they can rely on their neighbors, especially when confronted or threatened with supply disruptions or shortage.

In concrete terms, we will do this by developing new preventive measures and emergency plans at regional and at European level, building on the stress tests for the gas sector; we will also ‘stress test’ electricity security of supply in the future. And we will reach out, in these efforts, to the Energy Community and to many other strategic partners, to increase our energy security. After all, the Energy Union is not an inward looking project.

Second, the Energy Union should deliver the free flow of energy across Europe, as if it were a fifth freedom.

A century ago, when electricity grids were laid in Europe, they were built at national level. We have now to do the same at the European level. We will integrate the 28 European energy markets into one.

In concrete terms, this will require a stricter enforcement of existing EU law; this must apply also when agreements with foreign energy providers are negotiated. Therefore, we will come forward with a proposal that will ensure that intergovernmental gas contracts fully comply with EU law, and will increase transparency in commercial contracts.

We will come with new legislation to strengthen the European regulatory framework, and notably the Agency for Cooperation of Energy Regulators – a necessity if we want to continue to increase cross-border energy flows.

We will speed up critical infrastructure projects and monitor them much better, because without this hardware, we will only have an internal energy market on paper.

We will encourage and assist Member States to phase out uncoordinated, national policies that distort the functioning of the market. And we will produce, every two years, a report on how energy prices are composed, creating more transparency and a better functioning of the market.

Energy prices are a real issue for our consumers, but equally for the competitiveness of our industry.

Thirdly, the Energy Union puts energy efficiency first. We have to fundamentally rethink energy efficiency and treat it as an energy source in its own right

As we all know, the cleanest energy is the one we do not use.

The EU has set itself the binding target of reaching at least 27% energy savings by 2030.

We will come with new legislation on the electricity market design; this will ensure that energy efficiency can compete on equal terms with generation capacity.

We will promote better access to financing instruments for energy efficiency in the transport and buildings sector, notably at the local level, and we will encourage Member States to give energy efficiency primary consideration in their own policies.

Based on exchanges I recently had with some local mayors and local energy companies, I am deeply convinced that we can only build an Energy Union with the active contribution of citizens, local actors and cities: Smart cities. We have to literally plug in the citizens.

We will launch an initiative “Smart Financing for Smart Cities” to facilitate local access to existing funding instruments.

And fourthly, the Energy Union will make our energy system fit for the future, fit for a low-carbon society that is there to last. An energy system that is driven by renewable energy sources and in which citizens, cooperatives or local communities can play a much more active role. Consumer empowerment is a key word in this regard.

Europe has all the right elements to be a global leader, a global hub for developing the next generation of technically advanced renewables.

We will better focus our research and innovation policy, for instance on storage and electro-mobility, and we will ensure better coordination between Member States’ and EU innovation programs and financing.

Not only because it sustains our climate policy, the most ambitious world-wide, but also because it offers great opportunities for our industry, for growth and jobs here in Europe. New business sectors, new business models and new job profiles will emerge.

Finally, let me say a word on the governance. We will need to monitor the progress on our action plan, on all the new initiatives proposed in our roadmap – and see where to speed up our work.

Therefore, I will start developing, without delay, a streamlined and robust governance framework to deliver on its promises.

Before the end of this year, I intend to present the first edition of the annual State of the Energy Union, building on all the expertise we have in-house, the DGs and the Joint Research Center.

Together with my colleagues from the Energy Union project team, we will continue to engage with stakeholders, be they at International, European, national or regional and local level. A bottom-up process is very much needed to diffuse a sense of ownership on this key project. The main actors of this transformative process will be the citizens, the consumers, the industry, private investors, agencies, NGOs active in this field – all those with a vested interest in making the Energy Union a tangible reality.

I therefore very much look forward to our discussions and thank you for your attention.

(European Commission)