On 1 February, Vice-President of the European Commission in charge of the Energy Union, Maroš Šefčovič presented the second report on the State of the Energy Union since the adoption of the Energy Union Framework Strategy in February 2015. This year’s report focuses on the progress made in 2016 and addresses the key energy and climate issues for the upcoming year.
These are the key take-aways:
Looking back: 2016, the year of delivery
With a number of legislative proposals on the table, Šefčovič was pleased to report that the completion of the Energy Union, which is mostly about increasing energy security, deepening the integration of the European energy market, improving energy efficiency, decarbonising the economy and increasing competitiveness, is well underway.
Some of the initiatives where progress was achieved include:
- Clean Energy Package - in November, the Commission presented its Clean Energy package which includes eight proposals covering energy efficiency, renewable energy, electricity market design, and energy governance. Once this jumbo package, which sets the regulatory framework for the post-2020 period, will have been passed, about 80 percent of the Energy Union roadmap is completed.
- Paris Agreement - Another big milestone was the ratification of the Paris climate agreement, also in November 2016. The legally-binding global climate deal has now entered into force.
- LULUCF - Following the reform of the EU Emissions Trading System in July 2015, the Commission proposed the integration of non ETS sectors into its 2030 climate and energy framework with its so-called LULUCF regulation released in July 2016. The LULUCF tackles the greenhouse gas emissions from land use, land use change and forestry. The Commission also published a low-emission mobility strategy.
- Security of supply - The Commission proposed initiatives to better secure the EU energy supply and avoid risks of supply disruptions in case of political tensions, particularly with Russia. They also engaged in energy diplomacy and were part of the trilateral talks with the energy ministers from Russia and Ukraine.
- Interconnections: Vice-President Šefčovič expressed his satisfaction with new projects although 11 Member States are not on track to reach the 10 percent interconnection target set by the Commission for 2020.
Looking ahead: 2017, the year of implementation
With most of proposals on the table, the emphasis will be on the implementation of the existing legislation and a strict enforcement of current competition and state aid rules. “2017 should be the year of implementation”, the Vice-President said.
Šefčovič is hoping to see a speedy agreement with the other EU institutions on the ongoing legislative initiatives, and mentioned a time frame of nine months. This is an ambitious timeline considering 2017 will be a year of significant change and uncertainty on the political scene. National elections in the Netherlands, France, Germany and most likely in Italy, as well as the triggering of Article 50 by British Prime Minister Theresa May, may slow down the European legislative work in 2017. Šefčovič underlined again that the Energy Union is not just about energy and climate but also about modernising the EU economy by boosting economic growth and creating jobs repeated Šefčovič. With the right proposals, the potential is substantial.
The report presented by the Vice President will be now sent to the European Parliament and the Council.
Discussions on the new legislative proposals have already started in the European Parliament, who recently appointed rapporteurs, as well as the Council. Those discussions are expected to continue in the coming weeks and months. To help them underway, on 3 February 2017 the Vice-President will start his second Energy Union tour and travel to all EU member states, starting with the Netherlands, where he will meet with key national legislators and influencers to discuss the pertinence of a truly European energy policy and national aspects to it.
As could be expected, reactions varied across audiences. During a presentation of the report in the European Parliament, MEPs expressed concern that the Nord Stream II and the Opal gas pipelines would increase the dominance of Russian gas supplier Gazprom in Europe and jeopardise the EU’s independence and security. Frederick Federley (ALDE, Sweden), shadow-rapporteur on the Renewable Energy Directive, regretted the drop in investment in renewables identified by the Commission's report, arguing that a higher objective than the one proposed by the Commission could be achieved at the same cost, given that the cost of renewables has significantly dropped since 2012. Benedek Javor (Greens, Hungary), shadow-rapporteur on the Energy Efficiency Directive, called out the poor enforcement of the existing legislation affecting the energy market and said that that the Commission must make sure that nuclear installations are not exempted from public procurement provisions or competition law, which currently is not the case. Kathleen Van Brempt (S&D, Belgium), who is active on energy poverty, highlighted that there is an opportunity to protect vulnerable consumers through the electricity market design and renewable energy proposals and that the EU needs to make sure to grasp it.
“Current progress does not mean that the EU can rest on its laurels, because it has set the bar extremely low,” said Wendel Trio, director of the environment NGO CAN Europe. Greenpeace, on the other hand is much more critical and called for 100 percent renewables. “The EU’s current energy plans don’t come close to the scale of action needed to meet the threat of climate change,” said policy adviser Sebastian Mang. For Giles Dickson, WindEurope’s CEO, said: “It’s time to start integrating heating, cooling and transport into the electricity system. Renewables can play a key role in decarbonising heating and transport, particularly in urban areas. This is a major part of the global energy transition.”
APCO alumnus Cyrille Mai Thanh contributed to this post