As we approach the 14th edition of the EU Sustainable Energy Week (EUSEW), this is a good moment to remind ourselves of what an important part of the calendar this forum has become as the flagship annual event for those working to build a secure energy future for Europe. Bringing together public authorities, private companies, NGOs and others, it provides a vital platform for catching up with the latest advances, comparing notes and strengthening contacts within the sector. Through the various activities and events, including the Policy Conference, Energy Days, the Sustainable Energy Awards and the Networking Village, EUSEW highlights the successes and the challenges of the clean energy transition that is taking place across Europe.
As this will be the last EUSEW under this Commission mandate, it is also a good moment to take stock. In this article, I would therefore like to highlight the areas in which we have made progress, but also take the opportunity to underline that there is far more to be done in future. While fully recognising the important progress we have made in many areas, such as low carbon mobility and revisions to the Emissions Trading System, allow me to centre my thoughts around energy policy issues.
Last month we were able to finalise the biggest EU energy policy reform for 10 years, rewriting the policy rulebook through what we call the Clean Energy for All Europeans package. Based on the Commission proposals from November 2016, eight new pieces of legislation have been adopted.
By establishing a comprehensive future proof legislative framework to drive the energy transition, and by providing in this way certainty and predictability to investors, we can facilitate the necessary public and private investment to achieve this transition along the whole energy system – starting from research and innovation, to electricity generation and the better integration of renewables, cross-border infrastructure, through to end-use consumers.
In more concrete terms, the new rules outline our ambition for where we want to be by 2030. And how to meet our commitments under the Paris Agreement on fighting climate change.
We have set new, EU-wide targets for 2030 for an at least 32% renewables share in the final energy consumption and energy efficiency savings of least 32.5%. And we have also committed to achieve a level of 15% interconnectivity by 2030 – up from 10% in 2020.
But the changes go much further than just the numbers. We have redrawn the rules for the functioning of the EU electricity market – to facilitate the integration of renewables into the grid and more broadly strengthen the internal energy market. So that our energy prices will remain affordable for our citizens and competitive for our industry, our energy technologies have a strong industrial basis in Europe and can compete in a global and growing market, and investment are based on market signals, rather than subsidy signals.
Each Member State has now drafted a National Energy & Climate Plan (NECP) to outline how it intends to reach these objectives in the period from 2021-2030. The Commission services are currently analysing these drafts, with a view to coming forward with country-specific recommendations on each draft by the end of June.
These plans also include a longer-term view, looking forward to 2050 – and each country's broad view of where they intend to be mid-century in order to achieve a carbon-neutral economy. This follows on from the Commission's Long-term Strategy "A Clean Planet for All", published last November, which outlines how Europe can lead the way to climate neutrality by investing into realistic technological solutions, empowering citizens, and aligning action in key areas such as industrial policy, finance, or research – while ensuring social fairness for a just transition.
In line with the five dimensions of the Energy Union, these NECPs should also outline priorities for research and innovation in the next decade. I have always said that innovation is the key to link the clean energy transition with better jobs, sustainable growth and investments in Europe.
To achieve the Paris targets, the EU needs around €180 billion in extra investment every year until 2030 in energy efficiency, renewable energy, and clean transport. While the core of the investment has to come from the private sector, there is also a clear role for public investment. A well-coordinated and carefully targeted use of public funding can provide crucial links and have considerable leverage effect on private investment.
Nowhere is this more apparent than investment in research and innovation. Thanks to the highly efficient projects financed under the current EU Research and Innovation funding programme Horizon 2020, and notably through the Strategic Energy Technology (SET) Plan, only 15% of the funding for energy innovation comes from public sources. Each Euro spent on research and innovation brings much higher economic and societal return.
As the current EU budget framework (for 2014-2020) comes to an end, the Commission is keen not just to maintain these elements, but to increase them in the next budgetary period from 2021 to 2027. Furthermore, the entire EU budget aims at an overall target of 25% of expenditure supporting climate, including clean energy transition, objectives. An increase from the current level of 20%.
Negotiations for the next budgetary period are still ongoing, but I can confirm that the Commission concept is to increase the overall budget for the new Research and Innovation programme "Horizon Europe" by 25% to €100 billion – with a target of 35% of the overall budget for climate related R&I.
Another important change in Horizon Europe is the shift from a sector-approach to a system-approach in order to address challenges in a more holistic way, including a cluster for "Climate, Energy and Transport" in order to break boundaries between disciplines, sectors and policy areas. We believe that this will lead to higher impact because the real innovation in the future is likely to emerge at the intersection of disciplines and sectors. Here the proposed budget for 'Climate, Energy and Transport' is €15 billion - an increase of around 30% compared to similar activities in Horizon 2020. And it is an approach that fits well with EUSEW: anybody who has ever participated knows that integration and cooperation across technologies, sectors and disciplines has been a key ingredient of the week.
Missions are another novelty of Horizon Europe. We will launch a limited set of impactful and highly visible missions. They will have ambitious, time-bound and achievable goals easy to communicate to the public.
Horizon Europe will also take a new and more impact-focussed approach to partnerships with both the public and private sectors. It aims at rationalising their number in line with Union policy priorities and avoid overlaps and duplication. We aim towards a simpler architecture with three levels of partnerships: co-programmed, co-funded, and institutionalised partnerships. Again, EUSEW and the inspiring people, projects and ideas it brings together will help us shaping the missions and building on the expertise that we gather, for example in the area of sustainable and smart cities.
This new approach to partnerships will have a strong impact on the SET-Plan and there is an urgent need to use the new partnership tools in the most efficient and effective way. Despite the impressive results achieved so far through the SET plan, to be truly effective, we must ensure that every Member State pulls its weight. All efforts from Horizon 2020 and Horizon Europe will not be enough if EU Member States do not mobilise the national public funding.
To conclude, I would argue that this Commission has set the most advanced legislative framework in support to clean energy transition that is fit for the challenges ahead. With increasing public interest on combatting climate change, it is now up to the public and private sectors to invest and innovate with a view to delivering.
I am looking forward to EUSEW to discuss this with many of you!