A liberal approach to delivering the energy union

Written by Morten Helveg Petersen on 26 October 2016 in Opinion
Opinion

Achieving the energy union will not only help Europe secure its gas and energy supplies in the face of political tensions, it will also help reach climate goals, writes Morten Helveg Petersen.

Morten Helveg Petersen | Photo credit: European Parliament audiovisual


Achieving a real energy union is a historic challenge for Europe. It requires the unprecedented collaboration of its member states in finding solutions to the many barriers and bottlenecks. Being able to turn on the heating in winter can be a matter of life and death, therefore the biggest challenge for the EU will no doubt be ensuring security of supply for its citizens.

We currently import more than half of our energy at a cost of about €400bn per year, and as recent events at our eastern border have shown, at this moment we are vulnerable and dependent on foreign gas coming from unreliable third countries. This situation cannot continue. 

By importing less and becoming more efficient, for instance by insulating homes better, strengthening energy labelling and improving energy performance, we will not only be more secure and save costs in the most efficient way, but also work towards achieving our climate targets. 


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This is of the upmost importance, as transitioning from fossil fuel dependence can deliver both energy security and economic prosperity, including the generation of thousands of new jobs. Ultimately, the most secure forms of energy are sustainable ones.

To the question of how the energy union can be achieved, the answer is straightforward: through developing a fully interconnected energy grid which allows a genuine cross-border energy market and integrates renewable energy and high efficient technologies into the system at all levels.

There are certain important aspects I would like to highlight, the first being achieving a competitive internal energy market. There is today no single market for energy in Europe, and we cannot afford more fragmentation.

Regulated prices and other forms of excessive regulation are still standing in the way of well-functioning and efficient energy markets. In fact, a more integrated single market in energy could result in efficiency gains of some €50bn.

The ALDE group is calling for more interconnectedness so that we can get more renewables onto the grid and strengthen our energy security. Linking producers with consumers on a European scale, combined with diversification of supply, is key to achieving energy security and to lowering prices for consumers.

Achieving an energy union will hence mean facilitating the energy transition, which entails the rapid removal of remaining barriers in the internal market so as to facilitate private investment in smart and super grids, that will allow for an efficient balancing of sustainable energy on the net. 

We strongly believe that the energy union should prioritise market-based instruments for the promotion of low-carbon energy sources as a means to ensure that the energy transition takes place in the most cost-effective and environmentally friendly way.

This is important because it will be essential for increasing energy efficiency and moderating energy demand, like two sides of the same coin. We must lower costs and empower consumers, and by doing so we will also reduce emissions and dependency on third countries. Particular attention should go to the huge untapped energy efficiency potential lying with buildings and transport.

Smart technologies and ICT must be supported as they will play a crucial role. Research, science and innovation are essential for a swift transition to a low carbon economy and for the competitiveness of European companies.

Finally, the energy union will require far more coordinated governance of the energy market. Member states will have to accept that solidarity and security can only be achieved through more supranational action and oversight. 

Achieving free competition and a true internal electricity market will require stronger EU regulation and complete implementation in all member states of existing rules - in particular the third energy package.

For these reasons, we welcome the annual state of the energy union political debate, and we would like to see this as a central part of the process.

Europe needs a holistic approach to addressing these challenges. We need integrated solutions in order to get more renewables into the energy mix, cut our carbon footprint and use scarce energy supplies in the most efficient ways. Doing so will cut costs for business and make us more competitive, reduce energy bills for ordinary citizens, and help us innovate to become world leaders in the energy technologies of the future.

The ALDE group calls on Parliament to step up to the challenge. MEPs must play an active role in the governance of the energy union, but this will only happen if we are able to work together to find common ground on the crucial issues which often divide us. 

This is a priority for my group and me, looking to find pragmatic approaches but also approaches that maintain our ambition and determination to deliver the fundamental changes that energy union must deliver over the coming years.

 

About the author

Morten Helveg Petersen (DK) is Parliament's ALDE group shadow rapporteur on the towards a European energy union

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