Maroš Šefcovic: 2016 is the year of delivery on energy union
Maroš Šefcovic on how his plans will help consumers, reform the market, meet climate change goals and deliver energy security.
Maroš Šefcovic | Photo credit: Bea Uhart
2016 is going to be an important year for the European Commission in achieving the energy union. For the man responsible for achieving this major policy goal, Commission Vice President Maroš Šefcovic, this year will be "the year of delivery."
Recognising the political fallout of the Brexit vote, Šefcovic says, "In 2016 political challenges would not go away. This has become apparent especially over the summer, when we woke up to an abiding political reality of a member state leaving" the EU.
But despite plans for the UK to leave the EU, and the growing wave of Euroscepticism across the continent, for the Slovak, "The energy union offers a long-term advertisement for the virtues of the EU and our democracy."
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According to the European Commission, an energy union will mean making energy more secure, affordable and sustainable. It also wants to develop a free flow of energy across borders from a secure supply to every EU country.
Fundamental to achieving this goal will be introducing new technologies and renewing energy infrastructure.
For the consumer the aim is to cut household bills and create new jobs and skills, as companies expand, exports and boost growth. Ultimately it could lead to a sustainable, low carbon and environmentally friendly economy and help Europe achieve its climate change goals.
The Commissioner accepts that achieving all this is not going to be easy, as it not only covers a variety of complex issues but also means balancing the needs of individual member states.
Šefcovic says "I had the opportunity to engage in an intensive dialogue with representatives of all members states in order to embed their priorities and communicate the benefits energy union can bring to them."
Despite these challenges, he believes this dialogue "reveals how Europe can benefit from a diversity of views."
Šefcovic is keen to stress that the needs of Europe's citizens are key to his policies, he wants to see "citizens take ownership of the energy transition, benefit from new technologies, to reduce their bills, and where vulnerable citizens are protected. Our aim is to empower consumers to be able to make informed choices and buy their energy freely."
He wants to see Europeans not only be consumers, but also be energy producers who self-generate, store and sell energy. "Imagine you put a solar panel on your building, you will be actually making money while sitting in the park enjoying the sunny day."
The Commission's aim is to create an energy market that, "delivers a new deal for energy consumers", which entails saving money through better information so they can switch suppliers quickly and simply, investing in smart home and energy networks, and harmonising the protection of consumer data. Europeans will also be given more choice over their energy producers and distributors.
To achieve a single energy market, Šefcovic admits there needs to be further changes to current national regulations, and also reviews of current EU legislation.
But it is also up to national governments to play their part; "This change of course will not be possible without member states fully implementing and enforcing existing European rules, including consumer protection rules."
Despite all these reforms and new innovations for consumers, MEPs are putting pressure on the Slovak to also eradicate energy poverty as part of his energy union strategy.
Šefcovic accepts energy poverty is caused by different factors and comes in different forms, from the "pensioner who had to sleep in the kitchen be-cause it was the only warm place in the house or children who could not do their homework because their family was disconnected from electricity."
However, he believes it is up to member states to define energy poverty, "so they can formulate the most suitable and fitting definition."
He adds, "Nevertheless, reduction of customer vulnerability (financial, informational or geographical) plays a very important role in the creation of a single energy market strategy."
Šefcovic does not see regulated energy prices, used in some member states, as the answer in dealing with energy poverty.
He sees them as "limiting the development of competition, which discourages investments and the emergence of new market players," which in the long term would do more harm for consumers. Instead, he says, the answer to cutting energy bills is a flexible market.
Regional and local authorities also have a role to play in providing consumers with information, user-friendly tools, and financial incentives. Equally important is to support the development and introduction of smart technologies, to help users measure their consumption.
Not only does Šefcovic need to deliver energy which is affordable, following the recent historic COP21 climate change agreement, it must come from more sustainable sources. "Implementation of the first ever universal, legally binding global climate deal will be a difficult task."
He also admits that some sector and regions will have some difficulties, where switching to a reduced carbon economy will cost jobs.
But, he says, there will also be winners, pointing out that by having, "flexible and connected energy markets, this could save households and industry €400bn a year."
It is also up to member states, who all agreed to sign up to the Paris agreement, to make the most of new job opportunities and businesses which a low carbon economy offers.
The Commission is willing to work with member states and regions to make the transition through the use of different EU funds.
In order for Europe to become less reliant on carbon energy, Šefcovic believes boosting public and private investments in clean energy is the key to success in achieving decarbonisation and economic growth.
But there has been limited success for innovative technologies, with the Commissioner pointing out that the transition from academic research to marketable solutions "is lethargic when the private sector doesn't offer venture money."
He also points out that "great ideas in the digitalisation and consumer empowerment that already evolved into scalable business do not receive regulatory support."
Šefcovic is keen to stress that "the Commission will put on its thinking cap to address these problems."
If the EU is going to reach it climate change goals, the transport sector will need to substantially lower its emissions. However, the recent dieselgate scandal has rocked confidence in the ability of the Commission to deal with car manufacturers. "I think it's a very serious issue that compounded the problems we have with emissions in the transport sector."
He believes the scandal has "downgraded the image of the European car industry", undermining public confidence in European cars being the cleanest, safest and the best in the world.
Šefcovic believes it is now important to restore the image of the car industry and consumer trust. He announced, following several meetings with Volkswagen representatives, that from 1 January 2017 new tests will be introduced, "which will be conducted in real driving conditions, together with the member-states who have the power to inspect the cars on the spot." He wants to see these tests carried out even after a few years of use.
However, in the long term, he believes EU regulators should support emerging businesses and new alternative fuels, especially electrical and self-driving cars.
But in relation to the aviation sector, Šefcovic acknowledges that emissions are expected to grow by as much as 300 per cent by 2050. But he is keen to stress that the Commission will tackle this problem.
"It is good to see Pandora's box of curbing this growth globally was successfully opened this October," when the International Civil Aviation Organisation reached an agreement.
From 2021, 65 countries, including all EU member states, will be covered by global market based measures to offset CO2 emissions. According to Šefcovic, other countries will sign up in 2027.
But if he is going to ensure the lights and heating do not go off for Europeans, a key element of any future energy union will mean the EU delivering energy security.
With the EU being the world's biggest importer of energy, spending over €1bn a day, the Commissioner points out that some member states are entirely dependent on a single provider.
Highlighting how EU countries have suffered in 2006 and 2009 when gas supplies from Russia were disrupted, he says, "The scars in central and eastern Europe have not quite healed."
But Šefcovic highlights that the 2014 stress test on energy supply have shown that this region remains vulnerable to another gas crisis, albeit markedly less so then it was 10 years ago.
The Slovak stresses that the European Commission "has several irons in the fire to address energy security. Supply vulnerability needs to be confronted with a concurrent diversification of supply routes and sources, along with increasing reliance on sustainable indigenous sources."
To achieve energy security, the Commission wants to increase efficiency and integration of energy markets.
Key to this is diversifying energy sources, Šefcovic believes the development, supply, and storage of liquefied natural gas (LNG) should be considered, especially given the discovery of new gas fields in the eastern Mediterranean.
The Commissioner highlights the EU will be building new cross-border interconnectors costing €5.35bn, which has already had a "dramatic impact on gas supply security."
Hungary is now accessing Polish LNG through an interconnector within Slovakia, while the first gas interconnector between Poland and Lithuania will help energy security in the Baltic Sea region.
Šefcovic, despite the challenges his energy union plans face, is confident about the progress being made. "The energy union has gained momentum in the past months, and at the end of this delivery year we will have all the legislative pieces of the puzzle on the table."
According to the Commission Vice-President, the key themes of the package "will include an increased push for energy efficiency, review of legislation to achieve a fully integrated energy market, revision of renewable energy directive to increase the share of renewable energy consumed to at least 27 per cent by 2030, review of governance structures, facilitating the harmonisation and a comprehensive strategy for research, innovation and competitiveness."
But Šefcovic points out that once the package is delivered "the main challenge is, we do not pour too much cold water over its illuminating ideas. Their implementation in 2017 will be necessary to deal with climate change, create jobs and growth and provide energy security."
The Commission Vice President will be presenting his proposals in a set of legislative measures at the end of 2016, and wants to see them speedily implemented in 2017.
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