Building the Energy Union in a fast evolving energy landscape

By Dominique Ristori, Director-General for Energy, European Commission (pictured)
Summer 2016

The world's energy landscape is rapidly changing and Europeans face two major challenges: We have to respond to the pressing climate challenge of keeping the increase in global average temperature below 2°C with the aim to limit the increase to 1.5°C but also to find answers to geopolitical challenges that have major impacts on European citizens and companies.

For the first challenge, two years ago, the European Council agreed on a 2030 Framework for energy and climate setting EU-wide targets by 2030 to reduce emissions by at least 40% compared to 1990; to be at least 27% more energy efficient and to have at least 27% of renewable energy sources in our final energy consumption.

Secondly, geopolitical challenges over the past years have highlighted to all Europeans that diversifying energy sources and suppliers as well as adapting the energy system are crucial for our energy security. In that context, the Commission adopted on 25 February 2015 a Framework Strategy for a Resilient Energy Union with a forward looking climate change policy. It is one of the most strategic priorities for the EU for the coming years. It has created a new momentum for the transition towards a low-carbon, secure and competitive economy. The success of the Paris climate conference further underpins this strategy.

In this context, one of the top political priorities for President Juncker is for the EU to be the number one in renewables. Already today, Europe is one of the most energy and carbo nefficient economies in the world. More than 50% of our European electricity is CO2-free.

Moreover, technological developments are transforming the energy sector. We are transitioning from an energy sector characterised by long investment cycles for large power plants to increasing shares of renewable energies and more distributed generation patterns – in smart grids, smart homes – putting the energy consumers at the centre of the stage. 78% of new installed capacity in the past six years took place in the renewables' sector. Research, innovation and investments are more than crucial in that context and we continue to build bridges between project promoters and investors.

The European Fund for Strategic Investments (EFSI) was the first initiative launched by President Juncker which identified energy as one of the top priorities where investments are needed. This is particularly the case when it comes to building interconnections and infrastructure, energy efficiency and renewable energies. Today, the first implementations of EFSI are already largely oriented towards energy efficiency projects!

To fully support the energy transition, secure our energy and keep costs in check, we cannot continue with fragmented solutions. We will move away from a purely national approach to a true internal market perspective that leverages regional cooperation and Union-wide strengths. Today, security of supply cannot be considered as a solely national issue anymore, it requires us to develop a more integrated approach, based on the principles of solidarity and cross-border cooperation.

But if we want this fundamental energy transition to be successful, it also has to be socially fair and consumer oriented. The Energy Union is powered by people as it proposes a "new deal" by offering more choice, better services and more control over the way we use, and possibly produce, energy.

Important next steps will be taken after this summer, as the European Commission will adopt a package of measures in the energy efficiency field to ensure that we meet our 2030 target in a cost-efficient way. It will contribute to the decarbonisation of our economy, enhancing our energy security, providing Member States and investors with more predictability and certainty, and also boosting economic growth and jobs. It will consist of the revisions of the Energy Efficiency Directive and the Energy Performance of Buildings Directive, accompanied by a Smart Financing for Smart Buildings Initiative.

For consumers – both households and industries –, the Commission will publish this year a new energy prices and costs report. This will increase their transparency by providing an overview on different price levels in Member States and their influence on European competitiveness.

Moreover, later this year the Commission will put forward proposals on an ambitious package on renewable energy and a new electricity market design to boost cross-border trade, help embed renewables at the heart of our system and increase security of supply. The package will also include a Bioenergy Sustainability Policy.

In a nutshell, the Energy Union that we are currently building is laying down the foundation of an integrated and innovative energy market that will allow the EU to become world number one in renewables and increase energy security. These are precisely the topics we are going to discuss during the European Sustainable Energy Week (EUSEW) from 13 to 17 June in Brussels, the most important European conference dedicated to sustainable energy policy issues. I am looking forward to this year’s edition and to further build the Energy Union all together!