EU energy policy should focus on local resources

The EU's energy ambition has great potential, and Europe’s cities and regions are ready to deliver, writes Markku Markkula.

Markku Markkula | Photo credit: European Parliament audiovisual

By Markku Markkula

24 Mar 2017

It is difficult to argue with the objectives of the energy union: providing secure, affordable and climate-friendly energy for every citizen. Decarbonising our energy system and creating a sustainable economy powered by renewable energy will not only contribute to reversing global warming, but create new jobs. Europe's energy union offers a vision that economic growth is not incompatible with environmental protection.

Making the energy union work will bring down energy bills, create jobs, make Europe the leader in energy technology and help re-engage citizens in the European project. The EU is making strides to reach its energy and climate targets by 2020 but more needs to be done.

We need to keep supporting eco-innovation technologies and businesses, providing the necessary legal frameworks, fiscal incentives, funding programmes and binding targets to ensure we move the energy union agenda forward. And this can't be achieved without the strong role of cities and regions.


There is an investment gap which needs to be resolved to unleash the potential of the energy union. Investment levels in Europe have dropped by 15 per cent over the last decade. Ageing infrastructure and insufficient investment in digital and ecological transition is not only slowing down recovery but threatens Europe's competitiveness and future potential to grow and innovate. 

Better synergy between the EU's €80bn Horizon 2020 programme and €325bn in regional development funds can play an essential role in achieving the energy union targets. We need to build up local and regional innovation ecosystems with improved access to the best energy-efficient technologies - such as consumer-driven integrated heating and cooling systems.

Nevertheless, it is estimated that an extra €177bn of investments per year from 2021 to 2030 is needed and public funds will never be enough. Regions and cities need more knowledge and support to take advantage of the European fund for strategic investment (EFSI). 

Take for example a project being carried out by the Île-de- France region in France, where a €100m EIB loan aims to improve the energy efficiency of 8000 to 10,000 homes by 50-70 per cent. This project is expected to generate work to the tune of €200-300m and create 2000 to 2500 jobs. We need to use funds to boost decentralised energy installations and smart control and transport systems. 

Cities and regions should be encouraged to develop systems and technologies for decentralised energy production as this mitigates against monopolies developing in the energy sector and helps secure greater involvement of the public. We must ensure market access and grid connection to small local and regional renewable energy providers.

The review of the directives on energy efficiency and energy performance of buildings, access to finance and capacity building should be easier for local and regional authorities. 

I come from Finland, where we already have several apps to support citizen-driven activities such as showing house buyers the energy efficiency of the property or how many years it takes to cover the costs of installing solar panels in your roof. We need to put energy efficiency first and deploy all financial instruments for sustainable energy and energy efficiency investments.

The energy union needs a governance structure that brings cities and regions to the table so they can share their experiences and fine-tune delivery. The foundations are already there: over 7000 Mayors representing over 200 million European citizens have already committed to the Covenant of Mayors, making efforts to be energy efficient and sustainable.

Failure to formally recognise and involve local and regional governments in the energy union could put both European and national energy climate targets at risk. 

The European Commission has recognised that the energy transition is simply impossible without our Mayors, Presidents of regions and Councillors, yet we need a clearer plan to engage local and regional authorities in planning and implementing climate change and energy policies. 

This is well accepted, however - crucially - we need to speed up experimenting, testing, piloting and scaling-up throughout Europe.

We need more ambitious targets. The EU should upgrade its own commitments of cutting greenhouse gas emissions by 50 per cent instead of 40 per cent by 2030 compared to 1990.

We should aim for a carbon neutral world by 2050. By investing smart and thinking green we can definitely show the world that economic growth and environmental protection can go hand in hand for the benefit of our societies. But it needs to be closer-to-people and closer-to-resources. 

Greater energy efficiency can only be achieved if we introduce better regulatory and financial conditions. This means providing the right financial resources at European, national, regional and local level backed with the right mix of funds, energy performance contracts and public-private partnerships. Above all, it needs regions and cities to be part of the game and be a major player in the process.


Read the most recent articles written by Markku Markkula - Cities and regions are essential to reaching EU climate goals

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