European Commission Unveils Draft Energy Strategy

The European Commission has unveiled “A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy,” which is a key plank in the development of its plans for Europe’s energy sector through 2030.

The Framework Strategy broadly sets out five interrelated policies, and the steps to achieve its policy goals, including new legislation to redesign and overhaul the electricity market, substantially developing regional cooperation and an integrated market, and with a stronger regulated framework.

Among the measures designed to engender a unified, clean and sustainable European energy sector, the Commission has revealed that it will propose a new Renewable Energy Package in 2016-2017 to include a new policy for sustainable biomass and biofuels, as well as legislation to ensure that the 2030 EU target of at least 27 percent of EU energy to come from renewables is met cost-effectively.

In a Communication to the European Parliament, the European Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, the Commission noted that the European Union is committed to becoming the world leader in renewable energy.

However, the document also concedes that to achieve the 27 percent target new challenges must be addressed including developing appropriate energy markets and transmission and distribution infrastructure.

“Existing legislation and new market rules need to be fully implemented, enabling the roll-out of new technologies smart grids and demand response for an efficient energy transition,” the Commission says, adding that renewable production needs to be supported through market-based schemes that address market failures, ensure cost effectiveness and avoid over-compensation or distortion.

Within the package is an Interconnection Communication, setting out the measures needed to achieve the target of 10 percent electricity interconnection by 2020, which is the minimum necessary for the electricity to flow and be traded between Member States, the Commission says. It also includes a Communication that sets out a vision for a global climate agreement in Paris in December — a transparent, dynamic and legally binding global agreement with ambitious commitments from all parties.

In order to develop a stable investment framework, the Commission also says it will facilitate cooperation and convergence of national support schemes, leading to more cross-border opportunities.

Furthermore, the Commission believes that the EU needs to invest in advanced, sustainable alternative fuels, including biofuel production processes, and in the bio-economy more generally, to retain technological and industrial leadership and to meet climate change objectives.

The strategy has been broadly welcomed by the renewables industry, which sees it as a potential mechanism that will eliminate the patchwork of energy policies across the 28 Member States and the attendant threat of arbitrary and retroactive policy changes that have stifled investment.

Commenting on the development, Thomas Becker, CEO of the European Wind Energy Association (EWEA) argued the move marks “a clear signal to investors that Europe is open for business on zero-carbon energy.”

Becker said: "These are positive signs coming out of the Commission. We're seeing recommendations for a shift away from a fossil fuel-dominated economy to more sustainable, secure and decarbonised sources of energy."

"Increased interconnection between Member States and investment in the continent's aging electricity grids are of paramount importance. Above all the Energy Union must include cross-border cooperation to bind national grids together with more efficient technology that will allow nations to tap indigenous resources in remote areas and transfer power to Europe's densely populated cities," he added.

Similarly, Rémi Gruet, CEO of Ocean Energy Europe, said: “The Energy Union communication presents actions to speed up the transformation of the energy landscape through industries where Europe enjoys a competitive edge. It correctly highlights how the transition can create great opportunities for jobs and growth.”

Gruet added: “The proposal is far-reaching and will shake-up energy thinking in the national capitals. We are confident that national governments will understand the need to work in a coordinated way to bring sustainable, cheap and clean energy to their citizens. This is in every country’s national interest.”

And, while positive, the European Photovoltaic Industry Association (EPIA) called for the strategy to be followed with action. Frauke Thies, EPIA's Policy Director, said: "Now the Commission should follow up words with action. Europe needs an adapted energy market that boosts rather than hampers the energy transition and empowers consumers to access and control affordable, clean and secure energy."

However, trade groups representing the renewables heating and cooling industry covering solar thermal, geothermal and bioenergy sectors expressed disappointment with the strategy, and said that it “lacks reference on renewables for heating and cooling to improve security of supply; fails to see the synergies between energy efficiency and renewable energy, notably in the building sector; fails to propose a strong, separate governance for renewables and energy efficiency to  ensure consistency and comparability of Member States’ policies; and, fails to recognise that the internal energy market cannot be completed if only based on electricity and gas. A true internal energy market should cover heating as well,” a statement reads.

Summing up, Richard Black, director of the Energy and Climate Intelligence Unit (ECIU), observed that the EU’s draft Energy Union document shows the intention to switch the EU’s electricity supply system to a “flexible, smart low-carbon grid.”

Black says: “The EU’s draft international climate pledge doesn’t contain any surprises — essentially it is taking what EU governments decided to do back in October and putting that package of measures and targets forward into the UN climate convention.

“The Energy Union proposals are a bit more interesting and show that in principle the EU doesn’t want to continue with an electricity system dominated by fossil fuels, but switch to the kind of flexible smart low-carbon grid being pioneered in Germany, which should lead to a cheaper and more secure system that’s less dependent on Russia.”

Lead image: EU flag via Shutterstock

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