During a conference organised by the electricity industry sector, Eurelectric, on Thursday 27 October, Commissioner for Energy and Climate Miguel Arias Cañete provided an initial insight into the great raft of measures covering renewable energies, energy efficiency (particularly for the construction sector), the redesign of the electricity market and Energy Union governance – the new “winter package” – that the Commission will be unveiling by the end of this year.
Cañete stated that this package had three key objectives: generating the investment needed for sustainable and competitive energy transition; allowing consumers to participate actively in the energy system; and deepening cross-border integration to create a genuine EU internal energy market.
The starting point for this package of measures, which is said to enable €190 billion to be injected into the EU economy and up to 900,000 jobs to be created by 2030, is the “irreversible” process of the transition to a low carbon economy, protected by the international Paris climate agreement in 2015. The EU must both adapt to and drive this transition forward, and it is to this end that it is committed to reducing its CO² emissions by 40% by 2030, Cañete sated.
In this perspective, this package is based on three flagship initiatives: a new directive on renewable energies that seeks to underpin the 27% renewable energies target in the EU’s energy cluster by 2030, by creating the conditions for this sector (which already employs 1.2 million people and accounts for € 138 billion a year) to develop; revision of the legislation on energy efficiency to release the EU’s low energy potential and relaunch its economy, by focusing on a 30% energy efficiency target instead of 27% by 2030, which could create an additional €70 billion and 400,000 more jobs; a proposal for energy and climate governance, which could provide a regulatory framework and the necessary responsibility to stimulate energy transition.
Cañete said that investment is an absolute precondition for reaching the decarbonisation targets and the EU will need €177 billion a year in additional investment by 2021 to reach the targets by 2030. By drawing on the success of the financial branch of the Junker investment plan, the European Fund for Strategic Investments (EFSI) – of which quarter of the €116 billion deployed until now has been directed to the energy sector – or of the Connecting Energy Facility, the Commission will be proposing as part of its energy efficiency proposals, an initiative for 'Smart' buildings, seeking to remove the traditional obstacles in the building sector.
To ensure that investment is developed through appropriate incentives and therefore through good price signals, the Commission intends to propose, by way of a new renewables directive, a stable and clear framework for granting support to renewables, the objective of which will be to ensure that this support is given in a profitable way and without creating distortions on the market. The idea is to no longer support the oldest kinds of technologies but to leave more time for more recent technologies such as marine energy and offshore wind turbine power. The Commission is seeking to promote the use of tendering in support of renewable energies, Cañete explained.
The Commission proposals for the redesign of the electricity market will also seek to guarantee the active participation of consumers in the electricity market through self-production, home generating energy, storage and sales to networks, Cañete sated. The Commission objective is to remove the “many obstacles” preventing consumers from selling their electricity to networks or compelling them to do so at a disadvantage, so that the system becomes more flexible and allows consumers to respond to the way consumers produce and consume, the commissioner explained.
In addition, the Commission vision for a redesigned electricity market depends on the improvement of increased cross-border cooperation and thoroughgoing market integration: this involves pursuing infrastructure development, by taking advantage of the work undertaken by regional groups such as the group for the interconnection of countries in the Baltic region, the group responsible for the interconnection of the Iberian peninsula and the joint approach for the development of offshore wind power in the North Sea. It also involves ensuring better use of existing infrastructure by developing seamless cooperation between transport network managers and the strengthening of links between regulatory bodies, as well as a revised role for the ACER regulators’ body. “We will no longer tolerate a situation where bottlenecks are artificially pushed to the border, as is still the reality. This will enhance trade and reduce costs”, the commissioner stated.
On the issue of capacity mechanisms, Cañete said that his proposals would not ultimately provide incentives for public intervention, which he judged “unrealistic” but that he would fight for a change in the system based on 28 national approaches in order to develop a European or regional framework. The objective would in this case be to ensure that any public intervention was not used to the benefit of any specific national production capacity but rather for the cross-border generation or “response to demand” and that all capacity mechanisms were fully in line with the EU’s broader objectives in clean energy, the commissioner concluded. (Original version in French by Emmanuel Hagry)