3rd EU Energy Policy Summit takes place

Written by Simon Conheady on 30 March 2017 in EU Monitoring
EU Monitoring

On 28 March, the third EU Energy Policy Summit was held in Brussels. 

The event brought together representatives from the European Commission, European Parliament, national governments, energy regulators and the energy industry, academia, civil society and the media to discuss EU energy initiatives and their impact on the European energy market. The summit featured sessions on decarbonising the European economy via energy efficiency and the use of innovation and new technologies; energy security, energy diplomacy and resilience of energy systems; digital technologies and energy consumers; and energy market design and investment. Please find more details below.

Opening Session

Commissioner for Energy & Climate, Miguel Arias Canete, launched the policy debate by stressing that the Paris Agreement represents the commitment of most of the countries around the world to tackle climate change. The EU is also committed to remain a leader in this effort, he added, recalling that the Union has progressed on climate finance, is supporting the call for phasing out fossil fuel subsidies and is advancing dialogue with its partners around the world. He said he was travelling to China that very day to strengthen climate and clean energy ties.

He then moved on to briefly outline the main elements of the Clean Energy Package, presented in November, which has the objective to provide a stable regulatory framework to deliver the transformation of the EU energy system. He referred, in particular, to the governance proposal which represents a holistic way of looking across the five dimensions on the Energy Union strategy. It is up to the co-legislators to take the package forward and he was optimistic that this could be done by the end of this year without diluting the ambition and undermining the coherence of the proposals.

Furthermore, he hoped for an agreement on the EU ETS reform before the end of the Maltese Presidency and was confident that an agreement was close on the draft regulation on the security of gas supply, even though the trilogue negotiations, held the night before, did not result in a deal.

In 2017, the European Commission will also present its legislative proposals to advance on the objectives of the low-emission mobility strategy, including on CO2 emission targets for cars and vans, monitoring and reporting CO2 emissions and fuel consumption from Heavy Duty Vehicles etc.

He concluded that recent statistics by Eurostat on energy show that the energy sector can deliver positive news and demonstrate that cleaner energy and growth can go hand in hand.

Dr Konrad Mizzi, Minister within the office of the Prime Minister, in charge of Energy Projects, Maltese Presidency of the Council of the EU, said that the Clean Energy Package is meant to trigger a positive change in the energy sector. The legislation presented seeks to increase the security of supply, promote energy efficiency, decarbonise the energy mix and enhance research and innovation. At the same time, the focus remains on consumers who needs to be at the heart of the EU energy transition.

He then briefly outlined the presidency priorities for the months ahead:

  • Reach a political agreement on the Gas SoS draft regulation;
  • Secure sufficient time for discussions on the Clean Energy Package: the number of working parties on energy has increased, for instance;
  • Priority has been given to the proposals to revise the Energy Efficiency Directive and the EPBD, so that a general approach is reached on both before the end of the Presidency;
  • At the same time, the Presidency will seek to prepare the ground for the next presidencies to reach an agreement on the proposals regarding the energy market design;
  • The Presidency perceives regional cooperation as an important element of the Energy Union and therefore aims to put the spotlight on the Mediterranean and, more specifically, on how to 'untap' its energy potential;

Jerzy Buzek (EPP, PL), Chair of the ITRE Committee of the European Parliament , said that the concept of regional cooperation under the draft Gas SoS Regulation is crucial to achieving the objectives of the Energy Union. This is designed to build a common energy policy. The European Commission and ENTSOG should have increased responsibilities. The draft Regulation seeks to introduce a solidarity element too. However, member states currently adopt a less ambitious approach, he regretted. Business should aim to keep up the momentum and the ambition of the proposal, in order to convince national governments of the need to build a functional energy market.

Bertrand Piccard, President and Pilot, Solar Impulse World Alliance for Efficient Solutions, stressed that energy is a sector which can drive the Europeanisation project forward. Clean technologies exist to produce energy in a clean way and save on energy waste. Solutions to stimulate growth in the industry and decarbonise the economy exist.  The goal of their alliance is to bring different stakeholders with the same objective across the world together and find practical solutions to implement the general vision of the EU.

First Plenary Session: Innovation and Energy Efficiency to boost the cost-effective decarbonisation of the EU economy

Claude Turmes (Greens/EFA, LU) echoed the previous speaker by stressing that achieving the energy transition is all about solutions. Renewables used to be expensive, so cost and technology are no longer an issue. The solution is to have a change in management. Energy companies know that oil and gas production will go down in Europe and that the future is efficiency, renewables and clean technologies. The EU has standards, labels, targets and, most importantly, it has created the market. For instance, the EU will come up with very aggressive CO2 emission targets for cars and e-mobility. In addition, ICT and big data will make it so much easier to know where to reduce energy in the buildings. "We should build towards a much higher ambition and do not be surprised to see primary energy drop even further" he stressed. An environment must be created in Europe for start-ups and companies to become leaders of energy transition in the world, he concluded.

Peter Carlsson, CEO, Northvolt, regretted that the cost of energy storage is still too high for it to reach mass markets without subsidies. The aim of his company is to take the most advanced lithium batteries and to apply them at enormous scale. Unfortunately, the battery industry has not been very profitable to date, even though high level skilled workers, the access to raw materials and energy systems exist. There is no reason why the EU should not be ready to produce batteries in an effective way like China does. It is important to drive a circular economy and develop the processes to deal with end-of-life and reduce the use of raw materials in manufacturing processes. The aim is to build independent supply chains that can support the transformation of the EU industry, he concluded.

Diego Pavia, CEO, InnoEnergy, said that the Clean Energy Package is a huge opportunity for all the innovation value chain players. For the first time ever, regulation is treated on an equal par as research and innovation. The technology, innovation, regulation and business case exist for developing smart energy systems, but citizens' engagement is missing. Citizens do not want to be smart, their research has concluded. Their objective is to boost the end of the value chain and for this societal appropriation is necessary.

Heinz Haller, Executive Vice-President, President of Dow Europe, Middle East, Africa, India, Dow Chemical Company, stressed that the chemicals industry is crucial for energy transition, as the technology and innovation from the sector is necessary for developing advanced energy solutions. He then said that energy consumption has increased in the chemical industry, but that increase did not mirror the increase in the economic growth.

Hence, it has become necessary to reduce energy demand and tackle the issue of high energy costs, which is driven by electricity and renewable energy high costs. He reiterated the need for secure energy supplies and setting adequate infrastructure in place. He concluded that a clear vision, a long-term policy and proper implementation of that policy is necessary to achieve the energy transition, but the chemicals industry needs to be a part of this process.

Dominique Ristori, Director General, DG ENER, European Commission, recalled that, in the aftermath of the Paris agreement, many countries around the world have adopted the EU's approach in setting their own energy policies, namely setting targets, adopting regulatory measures to reach them and supporting innovation at the same time. It is important to anticipate trends and energy efficiency, he added. He also reiterated the need for building a bridge between energy and innovation, in a way that knowledge is transformed into an energy product. The regulatory framework can help to bridge this gap, he said, as the energy labelling approach has shown. Buildings also present a fantastic opportunity to use energy efficiency and reduce energy demand, he said. However, to achieve full command of energy consumption, the incorporation of ICT is necessary. At the same time, the capacity to install recharging points in buildings would accelerate the development of e-mobility. The EU now has a clear new target: nearly decarbonised building stock in the EU by 2050, he added.

Nikolas Baeckelmans, Vice-President, EU Affairs, ExxonMobil, said, in response to the remarks by Claude Turmes, that oil remains a relevant energy source at global level. They expect that energy demand will grow in the future even more. He then added that policy is an important driver of the energy mix and therefore energy efficiency is necessary. This has been seen in Europe, where decoupling between emissions and growth has been experienced more than in other parts of the world. ExxonMobil wants to produce energy in a more efficient way but also consume energy more efficiently. For instance, they are investing in cogeneration in refineries. In Europe, refineries are the most efficient in the world. The efficient industrial basis exists but regulation should not lead to relocating this energy efficient activity outside the EU.

Plenary II: Energy Security, energy diplomacy and resilience of energy systems

MEP Zdzisław Krasnodębski (ECR, PL) stressed that security of supply is very much interlinked with reducing energy dependence on third countries that use energy policy as a tool of political pressure. Nevertheless, it is sometimes connected to dependency among EU member states too. The EU gas package stressed the need for improving interconnection, although he believed that this was not the only solution for many member states. To him, it is a question of countries being fair to each other, having mutual understanding of each other's needs, while also pursuing their own goals and objectives, he concluded.

Mathilde Wörsdörfer, Director for Energy Policy, DG ENER, European Commission, said that energy security is the key issue of the Energy Union strategy. Around 50% of the EU's energy is imported in Europe and Europe will remain an energy importer in the future. At the moment, 5 member states are 100% dependent on a single supplier. Therefore, beyond reducing dependency, the aim of the EU is to diversify routes, increase the number of suppliers, develop indigenous resources and so on.

She then welcomed the speedy progress on the IGA decision and the result that the EU would now have the right to look all at ex ante agreements to check their compliance with EU law.

At the same time, the European Commission is stepping up its energy diplomacy through bilateral dialogue; also at a multilateral level (G7 Summit for instance).

Piotr Wozniak, CEO and President, PGNiG SA management board, said that increasing competition is very strictly connected with improving the security of supply. The development of infrastructure to provide gas from other directions is very important for Poland. In this respect, they are increasing their cooperation with Qatar. Poland believes in gas, the consumption of which is growing in the country, not only by the industry but also by households and transport. Gas has an important role to play in the decarbonisation of the country, he concluded, therefore they are investing in new gas pipelines to diversify supply, increase competition and drop prices.

Nikolai Lyngo, Senior Vice-President and Head of Corporate Strategy Statoil, argued that a clear direction and stability from policy makers is necessary. When energy companies make strategies and decisions they look at the long-term horizon, up to 2030, 2050 and beyond. However, there have been some geopolitical developments that put even the Paris agreement in danger. It is important to continue to work with measures that will decarbonise the industry. Renewables are now reliable and affordable energy suppliers to the market. Second, Europe needs reliable energy supply. Norway and Statoil are these reliable partners. At the same time, Europe needs to provide security of demand for them. They invest heavily in new energy solutions; 15-20% of their investment will be in renewables by 2030. The most efficient way to reduce the total carbon footprint in Europe is through renewable energy and natural gas combined. Stability from the policy maker, efficiency in the industry and security of supply, are the three elements to achieve energy transition, he concluded.

Guido Bortoni, Chair, Regulatory Authority for Electricity, Gas and Water, Italy, said that, in the past, the electricity power chain was vertically integrated in monopolies. The old paradigm was about how professionals do energy better. The demand was served by professionals dealing with production, distribution and transmission. However, due to ICT development and energy efficiency, a new paradigm, the "energy, do it by yourselves" is gaining ground. In Italy, distribution generation is about ¼ of the power production and continues to decrease. The presence for DSOs and local self-consumptions make the challenge to achieve adequacy even trickier. This is the reason why proper mechanisms to solve and ensure adequacy are needed, provided they are market driven mechanisms, i.e. capacity mechanisms. One needs to identify a balance and an impact assesment is needed that goes beyond the regulator's intervention. Solidarity enhances the security paradigm of the energy system, he added. A third dimension has been added to this formula; resilience, the capability of the system or to recover from failures, to keep the service running as wide as possible or kick start the service as quickly as possible. The importance of cyber will increase in the system requirements. Cyber security assumes the utmost relevance with the development and roll out of smart meters, he concluded. 

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About the author

Simon is an EU Monitoring Consultant at Dods EU Monitoring

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