16 December 2017
An Energy Union for European citizens

By Pierre Jean Coulon, President of the Section for Transport, Energy, Infrastructure and the Information Society (TEN) of the EESC, (pictured)
Summer 2017


The European Economic and Social Committee, one of the progenitors of the concept.

Pierre Jean Coulon, President of the Section for Transport, Energy, Infrastructure and the Information Society (TEN) of the EESCThe Energy Union is one of the European Commission's top priorities, the strategy for which was launched in March 2015. The EESC had already issued an opinion in January 2012 (I was the rapporteur) calling for the establishment of a European Energy Community – an idea close to Jacques Delors' heart – and for civil society to be involved in this process. The Energy Union has many similarities with this initial concept for an Energy Community, in particular the idea that energy challenges need to be treated as interconnected issues, and addressed in a spirit of solidarity.

Our work is based on the principle that energy has now become a basic necessity, without which there can be no business and, indeed, no decent life at all (including health, education, training, trade and industry, and access to other needs such as water and telecoms). Energy costs and prices, and security of supply, thus directly affect people’s well-being and the competitiveness of businesses large and small.

This is why the EESC has been closely involved in the process of developing the Energy Union. The Committee has published 23 opinions directly related to this initiative, and it is not done yet. Its opinions have addressed both general aspects such as the establishment of the Energy Union, and more sector-specific aspects.

Discussions between the EESC members themselves, and with their counterparts in the Member States, experts, all stakeholders and the other European institutions, have revolved around five main themes:

  • civil society's broadly positive response to the general idea of the Energy Union;
  • concerns about prices and market distortions;
  • the importance of acknowledging the social and societal dimension of energy transition;
  • a focus on vulnerabilities and prospects for consumers; and
  • the need for civil society to be involved in governance of the Energy Union.

THE CONCEPT OF THE ENERGY UNION
In its opinions, the EESC has:

  • underlined the need for an Energy Union in light of the challenges facing Europe's economies, not least their heavy dependence on external energy supplies (still nearly 60%);
  • highlighted the overall importance of the Energy Union for Europe's political project, presenting the free movement of energy as the fifth EU freedom; and
  • stressed the importance of political will and vision, shared by the institutions and by the Member States, in achieving Energy Union.

While the EESC takes a positive view of the concept, there are a number of aspects that in my opinion merit further attention by the European institutions and Member States.

ENERGY MARKET DISTORTIONS AND PRICES
The proper functioning of the energy market – particularly the electricity market – is a key challenge. Prices are set almost solely by the market (or markets?). And prices shape the behaviour of households and businesses, as well as of investors.

It is therefore important to get the prices and market design right. The EESC therefore, while welcoming the Commission's recognition of the need for a fundamental transformation of energy markets, given the ever-increasing use of renewable energy and the new opportunities offered by digitisation:

  • regrets the continuing existence of direct and indirect subsidies that are harmful to fair competition, and stresses the need to reform the emissions trading system in order internalise certain external costs of energy sources; and
  • echoes certain Member States that have been urging the Commission to recognise the increasingly important role of small-scale electricity producers, and to allow them to participate in energy markets by adjusting rules that were originally designed for large-scale, centralised energy production.

THE SOCIAL DIMENSION OF ENERGY TRANSITION
It is imperative to bear in mind that any transition – including the ongoing energy transition – will involve reshaping all economies, especially carbon-intensive ones, and will entail social, societal and economic risks for different groups and regions. It is therefore important to ensure that new "green" jobs are also decent jobs, in terms of social protection, health and safety, working conditions, and so on.

The EESC also stresses that affected workers must be given the assistance they need to retrain, to help them adapt to the new job profiles associated with these new energy options. While this is currently particularly urgent in the fossil fuel sector, especially coal, nuclear workers could in future find themselves in a similar situation if there is continued growth in these new types of energy.

The Committee has also expressed concern at the lack of real progress in tackling energy poverty, which affects more than 80 million people in the EU. I welcome the newly established Energy Poverty Observatory, which I called for in early 2015, and we are keen for the EESC to play an active role in it.

VULNERABILITIES AND OPPORTUNITIES FOR CONSUMERS ON ENERGY MARKETS
With its vision of an Energy Union "where citizens take ownership of the energy transition [and] participate actively in the market", the Commission is setting out a new role for consumers.

The EESC will take it at its word, not least with regard to the concept of prosumers (i.e. individuals or groups who produce and consumer electricity) and the increasing use of digital technology in the sector. For example, our Committee has observed that Europe's energy markets are already changing on the ground, with a significant rise in the number of prosumers of decentralised renewable energy: there are more than 100 000 even in France, with its highly centralised energy sector. This requires consumers to be able to participate actively in the market. It should also make rules and invoices easier to understand, and give all consumers, including the most vulnerable, access to the new opportunities offered by the growth of digital technologies.

CONSTANTLY EVOLVING LEGISLATION, DIALOGUE AND A CIVIL SOCIETY DIMENSION
Most of the progress made since the Euratom Treaty 60 years ago and in the ECSC has involved market liberalisation – which, to say the least, has not been a factor in lowering prices or in improving security of supply.

Efforts from now on must take proper account of the three dimensions of sustainable development: social, environmental and economic.

This new paradigm is clearly set out in the latest raft of measures on "Clean Energy for All Europeans".

This package includes a number of proposals that the Committee strongly believes should be targeted exclusively at the general public.

Improving the energy performance of buildings, for example, involves deploying the necessary funds to fit insulation and install new technologies in homes, businesses and administrative buildings. It will create a great many jobs, both directly and indirectly, and new activities for businesses throughout Europe.

The same is true of clean energy innovation, which needs to take account of various public and private initiatives and to connect and pool them at EU level.

Finally, as I mentioned above, this progress can only be real and tangible if it is based on solidarity:

  • solidarity between the European institutions and Member States;
  • solidarity between the Member States themselves - speaking with one voice on international energy issues; a continent-wide energy system that includes our Eastern, Balkan and Mediterranean neighbours, allowing for the free flow of cheaper energy; a low-carbon economy that helps to tackle climate change; an innovative, competitive and accessible energy technology sector; a larger skilled workforce for the energy system of the future; and targeted future-oriented investment.

This is the challenge: an Energy Union focused on the people, for the people – and by the people