Energy union is all-encompassing
The energy union is a clear economic opportunity that benefits all sectors, not just energy, says Dominique Ristori.
The energy union is a clear economic opportunity that benefits all sectors, not just energy | Photo credit: Adobe Stock
Energy is essential for all parts of our economy. It is the basis of all sectors of our society. It enables us to withdraw money, refuel our cars, heat our home and run our industries and hospitals. The geopolitical context is a reminder that energy security remains a key priority. This is all the more important given that the EU imports 53 per cent of the energy it consumes.
The EU needs to have access to secure and well-diversified sources and supplies of energy while ensuring that energy remains competitive. EU electricity and gas prices for industries are progressively converging towards those of the US. This positive trend should be further consolidated.
Important progress has already been achieved. The EU has been fostering stronger regional cooperation among member states and the development of the necessary interconnection to increase energy security and strengthen the internal energy market. A well-integrated and interconnected energy market is more resilient to shocks and allows for more diversified and competitive energy supplies.
In February 2016, the Commission adopted the security of gas supply package. With this package, the EU demonstrated that it is possible to reach a swift agreement on ambitious proposals. Both for the decision on intergovernmental agreements, but in particular for the new security of gas supply regulation, the negotiations were completed in record time. For the first time, the spirit of solidarity was enshrined in energy legislation.
To successfully implement the Paris agreement the energy transition will be decisive since today two thirds of greenhouse gas emissions are due to the production and consumption of energy.
Besides, with the growing share of renewable energy the energy system is becoming more decentralised, as up to 90 per cent of new capacity of renewable energy is connected at distribution level in the electricity sector.
Digital technologies are also playing an increasing role to integrate variable renewable energies in a secure and competitive way. The energy system is faced with the challenges of decarbonisation of our economy, decentralisation and digitalisation.
These growing pressures to move towards more secure, sustainable and competitive sources of energy call for a rapid adaptation of our energy system. This is a clear priority for the Commission which adopted in 2015 the energy union framework strategy with a forward-looking climate policy. Implementing the energy union is high on the political agenda, as recalled by the joint declaration by the Presidents of the Commission, Parliament and Council, signed last December.
Regarding the decarbonisation of our economy, the EU is well-placed to lead the clean energy transition. Indeed, the EU is well on track to achieve its energy and climate targets for 2020 in terms of reducing greenhouse gas emissions, improving energy efficiency and increasing the share of renewable in the energy mix.
In 2015 renewable energy accounted for 16.7 per cent of the energy consumption of the EU and around 30 per cent of electricity is now produced by renewable energy. This share is likely to reach 50 per cent by 2030.
The clean energy transition should be seen as a clear economic opportunity. The EU has already successfully decoupled economic growth from its greenhouse gas emissions. During the 1990-2015 period, the EU’s combined GDP grew by 50 per cent, while total emissions decreased by 22 per cent.
Already today, the renewable energy sector in Europe accounts for almost 1.1 million jobs with a turnover of around €150bn and the EU holds 30 per cent of all patents worldwide in renewable energy. The energy efficiency sector employs about 2.4 million people in Europe.
However, if we want to stay ahead of the curve and achieve global leadership, further efforts are needed to support this ambition and adapt our energy system to the challenges ahead.
That is why last November, the Commission adopted the ‘Clean energy for all Europeans’ package, which is now being negotiated between Parliament and the Council, facilitated by the Commission.
It is an ambitious package of eight key legislative proposals that puts energy efficiency first, sets the condition to integrate the growing share of renewable energies in the electricity internal market, and puts consumers at the centre so that they can all benefit from the energy transition.
This package sets a stable policy and regulatory framework that generates predictability and clear signals to trigger investment in clean energies and technologies and unlock the jobs and growth potential of the EU.
At an EU level, it is estimated that about €379bn investments are needed annually for the period 2021-2030 to meet the energy and climate objectives for 2030. The European Fund for Structural Investment (EFSI) is playing an important role in mobilising public funding in order to trigger the necessary private investments.
A substantial number of EFSI projects have already been approved and the energy sector is well represented, accounting for 21 per cent of the €236.1bn of financing already approved, with a focus on energy efficiency and renewables.
In this context, I am particularly pleased that the Commission is working closely with the European Parliament in organising a high-level conference on clean energy financing on 7 November. The aim is to bring together the financial sector and project managers with a view to better identifying bottlenecks and opportunities for investment.
With the Clean energy for all Europeans package it is estimated that 900,000 jobs will be created over the next decade in the clean energy sector but also in the R&D, energy services, construction and engineering sectors. Much of this will tend to benefit small, local SMEs. The energy union is a clear economic opportunity going beyond the energy sector with tangible benefits for all Europeans.
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