The Energy Union: boosting resilience, supporting innovation, empowering people

By Maroš Šefčovič, Vice-President for the Energy Union, European Commission, Brussels

“Our economic future depends on our leadership in the solutions of tomorrow.”

There is a proverb saying: if you want to go fast, go alone; if you want to go far, go together. With the Energy Union, I am convinced we have been managing both – going far at a fast pace. Some three years since the publication of the Energy Union Strategy, the European Commission has tabled all proposals needed for us to deliver. Guided by our commitment to climate action and by economic sense, our ambition is to put in place a new legal framework that will enable this profound transformation of Europe’s energy systems and the modernisation of our entire economy.

Maros Šefčovič (Photo: European Commission)

How to end fragmentation

When I took on the responsibilities of the Vice President for the Energy Union, the EU’s internal energy market was fragmented. Despite rules set at the European level, there were in fact 28 national regulatory frameworks in place. The retail market was not satisfactory, with little choice of energy suppliers and little control over energy costs. The existence of so-called energy islands relying on a single gas supplier due to a lack of adequate interconnectors was of particular concern in the context of a worrying geopolitical atmosphere. The clean energy transition was more of a concept than a set of convincing actions, let alone results.
In 2015, we therefore decided to address this and the prospective challenges by creating a true European Energy Union. I believe it is the most ambitious energy project since the Coal and Steel Community was launched in the 1950s. Based on five pillars – energy security, solidarity and trust; a fully-integrated European energy market; energy efficiency; decarbonisation; and research, innovation and competitiveness – the Energy Union is precisely delivering on all these issues.

Clean energy and energy efficiency

The launch of the Clean Energy for All Europeans package centred on renewables, energy efficiency and consumers was a particularly important milestone. Our most recent hat-trick – a political deal on the EU’s 2030 targets of 32% renewable energy and a 32.5% increase in energy efficiency, as well as the Energy Union’s governance – proves we are on track. Now I am looking forward to receiving Member States’ draft energy and climate plans by the end of the year so we can make their first assessment in the first quarter of 2019. These plans send a crucial signal of clarity and predictability to investors whom we need to invest here. I am convinced that what we do today – not tomorrow – will define the EU’s place on the geopolitical map of this century and make us frontrunners, followers or laggards of the 4th industrial revolution. Because our competitors also understand that a nation that leads in the clean energy economy will lead the global economy. And I want the European Union to be this leader, capitalising on our early mover advantage.

Future-proof energy infrastructure

I have made it imperative to engage with people during my Energy Union Tours across all Member States. When asked to sum up our vision in a sentence, I often mention three tasks – first, to secure enough energy, then to replace fossil fuels with renewables and finally to use clean energy to charge and transform our economy. During this process, our consumers are becoming empowered ‘prosumers’. When it comes to energy security, our philosophy has been clear: an Energy Union based on trust, solidarity and unity among Member States. A pan-European energy market based on free trade, competition and diversified supplies, sources and routes. No political strings attached. Fair prices for consumers. That is why I strongly believe that all new infrastructure projects should make us more resilient. This can be illustrated by projects such as the Southern Gas Corridor: A strategic ‘bridge’ between the Caspian region and the EU market, but also by better interconnections aimed at completing our internal energy market. Let me mention the first natural gas interconnector between Romania and Bulgaria and the Baltic Energy Market Interconnection Plan crucial for the synchronisation of the Baltic States with the European electricity grid – a few of many examples. Another will be Liquefied Natural Gas (LNG), as the EU has gained access to the global market. With the Klaipeda LNG terminal, we have seen positive effects for people in the Baltic States. Similarly, the European Commission gives strategic importance to a LNG project in Croatia. To support the state-of-the-art European infrastructure networks for energy – but also for transport and digital services – we have proposed a strengthened Connecting Europe Facility with a budget of € 42.3 billion for 2021-2027. It could also support cross-border renewable energy generation to help boost the strategic uptake of market-ready technologies. We keep in mind that electricity from renewable energy sources is expected to save us up to € 58 billion in fossil fuel imports by 2030. Moreover, for every 1% improvement in energy efficiency, the EU’s gas imports fall by 2.6%.

Strategic autonomy in key technologies

Key technologies are another area where I want to see the EU’s strategic autonomy strengthened. Drawing on lessons learned in the photovoltaic sector, I am referring to batteries – crucial for further penetration and integration of renewable energy as well as a critical component in Europe’s e-mobility value chain. We need to capture this sector, potentially worth EUR 250 billion yearly in Europe alone. In practice, this implies developing manufacturing capacities and creating an innovative, sustainable battery ecosystem here. That is why we have set up a European Battery Alliance – consisting of some 120 industrial and innovation actors, Member States, the European Investment Bank – and tabled a robust action plan to boost this industry. According to recent reports, China has secured seven times more EV investments than the EU in the last 12 months. We need to do our utmost to ensure that the best, cleanest and most competitive cars are still produced in Europe. Our economic future depends on our leadership in the solutions of tomorrow. Transport, however, is not the only sector fundamentally changing because of the clean energy transition, or because of digitalisation and automation. Therefore, like with batteries, we need to focus on establishing a strong industrial base in strategic sectors and on fostering public-private partnerships with joint action plans.
I believe this is critical to our ability to innovate as well as bridge the gap between demonstration and commercial deployment of innovations. Otherwise the EU becomes an incubator for the rest of the world and European innovators end up fleeing to our global competitors despite our initial investment. The time to show that ‘we mean business’ is now.

Energy Union
The Energy Union was created in 2015 and focuses on five
mutually supportive dimensions:
• security, solidarity and trust: diversifying Europe’s sources of
energy and ensuring energy security through solidarity and
cooperation between EU countries
• a fully integrated internal energy market: enabling the free
flow of energy through the EU through adequate infrastructure
and without technical or regulatory barriers
• energy efficiency: improved energy efficiency will reduce
dependence on energy imports, lower emissions, and drive
jobs and growth
• decarbonising the economy: the EU is committed to a quick
ratification of the Paris Agreement and to retaining its leadership
in the area of renewable energy
• research, innovation and competitiveness: supporting breakthroughs
in low-carbon and clean energy technologies by prioritising
research and innovation to drive the energy transition
and improve competitiveness.
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Maros Šefčovič has served as the Commission’s Vice-President in charge of the Energy Union since November 2014. He graduated from the University of Economics in Bratislava and the Moscow State Institute for Foreign Relations, and holds a doctoral degree in law and European Law from the Comenius University in Bratislava. After his diplomatic career, he has held different positions at the European Commission since 2009. In 2014, Mr Šefčovič was elected as Member of the European Parliament, which led to his appointment to the current position.

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