The European Commission has adopted the European Energy Union package—a framework strategy for a resilient energy union with a forward-looking climate change policy. As a next step, the Commission will present it to the EU institutions. The European Council will discuss the Energy Union at its meeting in March 2015.
According to the EC, the European Energy Union is intended to bring about a fundamental transition in Europe’s energy system towards an economy that is no longer driven by fossil fuels and where energy security is based on solidarity and trust; where energy flows freely, without any barriers, in a truly integrated EU-wide energy system; where strong, competitive companies develop innovative products and technologies with the help of European research and innovation, and where citizens play a stronger role in the energy system, using technology to reduce their bills, and vulnerable consumers are not left behind.
Today, we launch the most ambitious European energy project since the Coal and Steel Community. A project that will integrate our 28 European energy markets into one Energy Union, make Europe less energy dependent and give the predictability that investors so badly need to create jobs and growth. Today, we set in motion a fundamental transition towards a low-carbon and climate-friendly economy, towards an Energy Union that puts citizens first, by offering them more affordable, secure, and sustainable energy. Together with all other Commissioners who have worked closely on the project team, and with the support of the entire Commission, I am determined to now turn this Energy Union into reality.—Maroš Šefčovič, the Vice-President responsible for the Energy Union
Latest data shows that the EU imports 53% of its energy at a cost of around €400 billion (US$454 billion), making it the largest energy importer in the world. Six Member States depend on a single supplier for their entire gas imports and therefore remain too vulnerable to supply shocks. It has also been estimated that every additional 1% increase in energy savings cuts gas imports by 2.6%.
75% of EU housing stock is energy inefficient. 94% percent of transport relies on oil products, of which 90% is imported. Collectively, the EU spent more than €120 billion (US$136 billion) per year—directly or indirectly—on energy subsidies, often not justified. More than €1 trillion needs to be invested into the energy sector in EU by 2020 alone.
Today, the European Union has energy rules set at the European level, but in practice it has 28 national regulatory frameworks. This cannot continue. An integrated energy market is needed to create more competition, lead to greater market efficiency through better use of energy generation facilities across the EU and to produce affordable prices for consumers.
… Europe needs to make the right choices now. If it continues on the present path, the unavoidable challenge of shifting to a low-carbon economy will be made harder by the economic, social and environmental costs of having fragmented national energy markets. The current low oil and gas prices, while they last, should be seized as an historic opportunity—when combined with the falling cost of cleaner forms of energy, a strong EU climate policy and the emergence of new technologies—to reset the EU’s energy policy in the right direction: that of an Energy Union.—Energy Union Framework Document
The Energy Union is based on the three long-established objectives of EU energy policy:
- security of supply;
- sustainability; and
To reach these objectives, the Energy Union focuses on five mutually supportive dimensions:
- Energy security, solidarity and trust;
- the internal energy market;
- energy efficiency as a contribution to the moderation of energy demand;
- decarbonization of the economy; and
- research, innovation and competitiveness.
The strategy document released on 25 Feb outlines the key actions required to achieve the Energy Union:
Full implementation and strict enforcement of existing energy and related legislation.
The EU needs to diversify its supply of gas and make it more resilient to supply disruptions. The Commission will propose a resilience and diversification package for gas in 2015-2016 by revising the existing security of gas supply Regulation. The Commission will also prepare a comprehensive strategy for liquid natural gas (LNG) and its storage.
Further, the Commission will work with Member States to develop access to alternative suppliers, including from the Southern Gas Corridor route, the Mediterranean and Algeria, in order to decrease existing dependencies on individual suppliers.
Intergovernmental agreements should comply fully with EU legislation and be more transparent.
The right infrastructure is a precondition for completing the energy market, integrating renewables and security of supply. The Commission will support the implementation of major infrastructure projects, particularly the Projects of Common Interest, through the available financial means, e.g. the Connecting Europe Facility, the European Structural and Investment Funds and the future European Fund for Strategic Investments to leverage the necessary private and public funding.
The Commission will also bring together information on EU-funded infrastructure projects to bring more coherence and to maximize their impact. In addition, the EC will create a dedicated Energy Infrastructure Forum to discuss progress on major infrastructure projects with Member States, regional cooperation groups and EU institutions. It will meet for the first time in late 2015.
Creating a seamless internal energy market that benefits citizens, ensuring security of supply, integrating renewables in the market and remedying the currently uncoordinated development of capacity mechanisms in Member States call for a review of the current market design.
The regulatory framework set-up by the 3rd Internal Energy Market Package has to be further developed to deliver a seamless internal energy market to citizens and companies.
Regional approaches to market integration are an important part of the move towards a fully integrated EU-wide energy market.
Greater transparency on energy costs and prices as well as on the level of public support will enhance market integration and identify actions that distort the internal market.
The EU has set itself the target of reaching at least 27% energy savings by 2030. In 2015 and 2016, the Commission will review all relevant energy efficiency legislation and will propose revisions, where needed, to underpin the 2030 target.
Retrofitting existing buildings to make them energy efficient and making full use of sustainable space heating and cooling will reduce the EU’s energy import bills, reinforce energy security and cut energy costs for households and businesses.
The Commission will develop a Smart Financing for Smart Buildings initiative to make existing buildings more energy-efficient, facilitating access to existing funding instruments. The Commission will also propose a strategy to facilitate investment in heating and cooling.
The EU needs to speed up energy efficiency and decarbonization in the transport sector, its progressive switch to alternative fuels and the integration of the energy and transport systems. In pursuit of this, the Commission will propose a comprehensive road transport package promoting more efficient pricing of infrastructure, the roll-out of intelligent transport solutions and enhancing energy efficiency.
The Commission will also take further action to create the right market conditions for an increased deployment of alternative fuels and to further promote procurement of clean vehicles. This will be delivered through a mix of national, regional and local measures, supported by the EU.
In June 2015 the Commission will organize a Stakeholders Conference on driving the Decarbonization of the Road Transport forward.
The climate and energy framework for 2030 agreed to at the October European Council now needs to be implemented. The EU will provide an ambitious contribution to the international climate negotiations.
The EU has agreed the target of at least 27% at EU level for renewable energy by 2030.
The EU needs to develop a forward-looking, energy and climate-related R&I strategy to maintain European technological leadership and expand export opportunities.
The EU will use all external policy instruments to ensure that a strong, united EU engages constructively with its partners and speaks with one voice on energy and climate.