Eugene Eteris, European Studies faculty, RSU, Riga, 24.04.2015.



The EU’s main concept of the Energy Union is based on providing Europeans with secure, competitive and sustainable energy. The Commission vice-president, Maroš Šefčovič describes the actions needed by the EU institutions and the member states to reach that goal.

EU’s urgent actions are implemented in several directions: = securing energy supply through solidarity and trust; = creating a fully integrated European energy market; = priority on energy efficiency; = decarbonising national economy; and = investing in research, innovation and competitiveness. That EU’s energy agenda was translated into both a concrete EU strategy and a specific teamwork to implement the agenda. The strategy was conceived as a 'triple win' strategy to: a) benefit citizens, b) benefit national economies, and c) protect the environment. These three ideas go hand in hand in making Europe a better place to live. The Commission vice-president, Maroš Šefčovič described the actions needed by the member states to make an impact on the Energy Union in each of these main three strategy points.



The Energy Union empowers citizens The strategy is addressing the “citizens’ benefits”. Presently household consumers have too little choice of their energy suppliers and over their energy costs. Besides, there are unacceptably high percentage of European households which cannot afford to pay their energy bills. One of the solutions is to create a European market structure which is more competitive. This means ensuring that energy can flow freely across European borders so that consumers have access to more suppliers and can choose the best service and price. That means, to remove obstacles to cross-border energy flows, i.e. those infrastructures or/and regulations which are inconsistent or/and unstable. Major steps in that direction are the Commission’s recent initiatives to accelerate market integration of the Iberian Peninsula and of Central and South-Eastern European gas markets. Besides, citizens are no longer passive consumers. They are becoming so-called “prosumers”, i.e. consumers who can also produce energy and supply it into the energy grids. This will allow individuals not only to generate revenues from their private energy production but also to benefit from lower prices of energy produced by others. For example, with “smart grids” in place, a sunny day in Lisbon should lower energy prices in Madrid (if sun panels built); and a windy day in Budapest should lower energy prices in Vienna (if windmills are in place). It might take time to make this picture true, but all the potantials are there for the member states…



The Commission intends by mid-2-15 to present a first draft of a new electricity market design in order to: a) better integrate renewables into the grid; b) ensure national interventions do not distort the market; and c) increase competitiveness with the aim of reducing prices.

Then, legislative proposals would follow during 2016. The Commission is already providing citizens with information on the electric appliances’ energy efficiency and intends to review the Energy Labeling directive and other EU legislation on efficiency of buildings and transport. The Commission’s two Vice Presidents, J. Katainen and Maroš Šefčovič, assisted by a group of other Commissioners in the task force, recently received a “note” from President Juncker to elaborate a strategy on “Smart Cities”. This strategy will ensure that the urban regions, where the vast majority of the Europeans live, make smart use of the latest innovations to make European cities more resilient and sustainable.



The Energy Union and industry Important is the impact of the Energy Union on the member states’ industries, in particular, the Europe's renewable energy sector. This industry currently runs a combined annual turnover of €129 billion and employs over 1 million people. EU companies have a share of 40% of all patents for renewable technologies in the world. Hence the EU’s challenge is to retain Europe's leading role in global investment in renewable energy. Several countries are eager to provide renewable energy to their citizens; e.g. in India, some 300 million citizens who currently don't have proper access to electricity. Thus, not only India (with its about 1 billion citizens) can cooperate with European companies, the potential for European renewable industry is therefore huge… The “energy transition” is not only about the energy sector; expected changes will benefit all industries. For example, current wholesale gas prices are still more than twice as high as in the US. This reduces the competitiveness of European industries, especially those which are energy-intensive. Then, the EU companies and consumers pay higher prices while being highly dependent on too few dominant suppliers, making the EU states vulnerable to disruptions and price distortions. In that respect, the EU Commissioner M. Vestager announced the Commission's Statement on objections against Gazprom’s dominant position. The EU’s solution is to diversify energy sources; this means diversifying the sources of energy (i.e. who we buy our energy from), which primary materials are used to produce energy, and the technologies used to energy production. In gas sector, the Commission intends: to develop an EU-wide strategy for LNG and storage; to establish partnerships with additional suppliers; and build the infrastructure to bring the gas from those suppliers. One example to that is the Southern Gas Corridor which is a strategic project to bring gas from Central Asia. In fact, added the Commission vice-president, Maroš Šefčovič, reducing the energy costs for the European industries would create a “virtuous cycle”. By spending less money on their energy costs, European companies will become more competitive on the global market and will be able to invest more in their research and innovation. This will, in turn, allow them to adapt to the new emerging sectors and create new innovative solutions for the energetic and economic transition. That, in return, will again reduce European energy prices… And so the cycle continues! This Commission will support this cycle at various points. For example, energy research funding has already been doubled under Horizon 2020 and the Commission will propose an upgraded Strategic Energy Technology Plan to focus on the areas with the most potential.



The Energy Union serves the European environment The EU’s general idea is to benefit the environment and stop the climate change. That is why the Commission welcomed the concrete commitments of Europe's leaders to fight climate change. In October 2014, the European Council endorsed binding EU targets by 2030 aimed at: cutting greenhouse gas emissions by at least 40%; increase the share of renewable energy to at least 27%; and improve energy efficiency by at least 27%. These targets are now translated into concrete legislation, such as the revision of the Emission Trading System (ETS), of the Energy Efficiency and Renewable Energy Directives.

