How Europe can power its green recovery

The energy sector has weathered the Coronavirus crisis well, but more needs to be done to prepare for the demands of the future, writes Kadri Simson.
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By Kadri Simson

24 Jun 2020

This week, the European Commission hosts the 15th edition of the Sustainable Energy Week. Unsurprisingly, its focus has been determined by the current crisis: the role of energy in the green recovery.

While it is not easy planning big events at this time, it is very much the right moment to plan for the future.

The COVID-19 pandemic has left no country, and person untouched. It has changed our healthcare systems and the way we work, travel and study.


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Many had assumed that the last economic crisis was a once-in-a-generation event - yet here we are, on the brink of the biggest economic downturn since the Second World War.

However, we can see this as an opportunity to build a better future for EU citizens. For this to happen, the Commission, the European Parliament, Member States and regional and local governments, all need to work together towards a common goal.

“We can be proud that the EU’s energy sector was well-prepared for the crisis and weathered even the worst moments without any disruptions. But to prepare for the demands of the future, more needs to be done”

Europe learned from the last economic crisis that a rapid and large-scale response is needed to prevent a long-term recession and a sharp rise in unemployment. I remember well the previous global financial crisis.

At that time, I was working in the Estonian national parliament. As in many other EU Member States, the focus then was on pursuing austerity measures - putting fiscal concerns ahead of people’s well-being.

This time, we must save the economy without leaving anyone behind. Our response to this difficult task is the massive €1.85 trillion economic recovery plan, presented by the Commission at the end of May.

Some €750bn of this will come from the new economic recovery instrument, ‘Next Generation EU’, with the remainder coming from the EU budget (€1.1tln). The EU has never made such a large contribution to economic recovery.

On the one hand, we need to put money where it has an immediate economic impact and in the most affected sectors. On the other, we need to keep in mind the long-term benefits of making our economy more resilient.

By supporting yesterday’s priorities and technologies with public money, we would seem to be taking one step forward, but in the long run could be two steps back. This is why the green and digital revolutions are at the heart of our recovery plan.

These are the areas where Europe can benefit from rapid progress and increase its economic competitiveness, strategic autonomy and quality of life.

Energy plays a key role in everything we try to achieve, and our efforts here will focus on energy efficiency and renewable energy. Nearly 40 percent of Europe’s energy consumption results from the heating and cooling of buildings.

This makes renovation one of the best ways to save energy and reduce carbon emissions. However, what is equally important is that building renovation, as a labour-intensive activity, creates new jobs and boosts the economy.

According to the International Energy Agency, 60 percent of the money available for improving energy efficiency in homes ends up in the pockets of people involved in the production of materials or construction.

This autumn, we will launch a Renovation Wave initiative aimed at making the renovation of homes as simple and extensive as possible - with special attention paid to apartment buildings, schools and hospitals.

Renovation projects can be financed by the ramped-up InvestEU programme or the Cohesion Funds top-up under the proposed recovery instrument. Investment in renewable energy is equally important.

“While times may be uncertain, our goal is clear: an EU powered by clean energy, treading lightly on the planet and caring for its people”

To reach climate neutrality by 2050, we must increase offshore wind farms capacity by a factor of 20. In our proposal, there are opportunities for renewable energy investments under both the Economic Recovery and Resilience Facility.

Meanwhile, InvestEU and the new Strategic Investment Facility can fund the development of innovative technologies such as hydrogen, energy storage, batteries and carbon capture and storage.

We can be proud that the EU’s energy sector was well prepared for the crisis and has weathered even the worst moments without disruption.

However, to prepare for the demands of the future, there is much more to be done. Our energy system needs to be greener, smarter, more effective and less wasteful. Our first step will be the adoption of an Energy Systems Integration strategy in early July and a related strategy on hydrogen.

Today’s energy systems are mostly built along parallel value chains that rigidly connect a specific energy source to the end user (such as oil products in transport). This is inefficient and makes deep decarbonisation very challenging.

What we need are more flexible and better-integrated systems. This means greater electrification, but also, for example, better use of residual heat or the use of hydrogen and other green gases.

Hydrogen has huge potential, particularly in providing clean energy to those sectors that are difficult to decarbonise such as heavy industry and transport in particular.

Our main focus is on making green, renewable hydrogen more competitive, which requires two things: larger electrolysers and more renewable energy.

The hydrogen strategy will provide a vision of how to develop and exploit its potential and EU’s leading role in this field. While hydrogen currently makes up only two percent of the EU’s energy mix, by 2050 it could be 10-16 percent.

I have high hopes that we will develop this area even further during Germany’s EU Council presidency.

While times may be uncertain, our goal is clear: an EU powered by clean energy, treading lightly on the planet and caring for its people.

With the sustainable recovery package, a strong EU budget and the European Green Deal, we are well on the way to getting there.

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Energy & Climate
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