EU climate chief: we need to be deal makers

Climate Commissioner makes case for new energy package, arguing it will boost clean energy, security and hand more power to consumers

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Last year alone, clean energy set new records for investment, jobs and new capacity added: A top record global investment of over 300 billion euros, more than six times more than in 2004.

For the first time ever, more than half of all added power generation capacity in the world came from renewables. And a record figure of 8.1 million jobs in the global renewables sector.

What do these figures show? Three things:  First, that clean energy is here to stay and grow. Second, that clean energy has become a jobs and growth engine.  And third, that there is a global race underway to lead the clean energy transition.

So what does Europe make out of this global energy transition? Will it be a deal taker or a deal maker? A leader or a follower?

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With today’s measures we will help Europe stay ahead of the curve. We will help Europe turn the Paris Agreement into concrete action. And we will make sure Europe’s energy system is fit for purpose.

What we are presenting today is:

-an investment package: setting the conditions and strong incentives for investing in the grids, new generation, housing and industry;

-an innovation package: providing a clear market pull for new technologies, and lowering thresholds for full scale uptake on the market;

-a market package: making energy markets work better, in a more market-oriented way and creating stability and predictability for the private sector;

-a consumer package: strengthening the role of consumers, their rights and active role on energy markets.

And it is clearly European package: demonstrating the benefits of a more coordinated EU wide approach to energy policy;

The main building blocks of the proposals cover energy efficiency, renewable energy, renewable the design of the electricity market, and governance rules for the Energy Union.

Let me start with energy efficiency first.

I am particularly proud that we are proposing a binding 30% energy efficiency target for 2030, up from the current target of at least 27%.

It has not been an easy ride, but as you know, I have fought hard to have a higher energy savings target.

Mainly because, compared with the current 27% target agreed in 2014, the new 30% binding target will, by 2030:

-Create about 400,000 new jobs;
-Reduce gas imports by 12%;
-Save €70 billion in fossil fuel import bills;
-Add up to €130 billion to the economy;
-Cut health damage costs by up to €8.3 billion and saving over 30,000 lives.

For buildings –a sector which accounts for 40% of Europe’s energy consumption- we propose new rules mainly in order to speed up the renovation rate of existing ones.

With them, we will boost the use of innovative and smart technologies to ensure that buildings operate efficiently.

In concrete terms, our proposals will:

-Speed up investment in the renovation of buildings;
-Create a building renovation market with a value of €80-€120 billion in 2030;
-Lower energy bills for consumers and households;
-And take up to 3.2 million households out of energy poverty thanks to energy savings.

This measure will be accompanied by a new Smart finance for Smart Building initiative to promote investments, growth and jobs for energy efficiency and renewables in buildings.

This new initiative, in close cooperation with the European Investment Bank (EIB) and the Member States, can unlock an additional €10 billion of public and private funds until 2020.

For consumers, the new rules we present today will help lower energy bills via changes in metering and billing, clearer and more frequent information on energy consumed.

And last but not least, for products, the Commission adopted a new Ecodesign work plan.

It includes a list of new product groups and outlines how Ecodesign will contribute to objectives for a circular economy, specific measures on air conditioning units and guidelines for voluntary agreements.

Second, renewable energy.

The new Renewable Energy Directive, together with the new proposals on the New Electricity Market Design and Governance, will:

-set the right conditions for investors;
-empower consumers;
-make energy markets work better for renewables and help us meet our climate targets;

The EU has a target to achieve a share of at least 27% renewables in final energy consumption by 2030, which includes a 50% share of renewable electricity.

But investments in renewables have dropped in the EU by more than half since 2011. We now account for only 18% of global total investment.

Moreover, renewables are not sufficiently integrated into EU energy markets.

Our new measures will help revert this trend and allow the EU to achieve its renewable energy targets by:

-helping EU countries to design support schemes to achieve a more market-orientated, cost-effective, EU-wide approach.
-Simplifying administrative procedures to get projects up and running.

In transport – where oil supplies about 94% of all energy used to power European cars, trucks, ships and planes – the new measures will boost the use of advanced biofuels, electricity, hydrogen and renewable synthetic fuels.

On bioenergy in particular, after many years of uncertainty, we are getting it right:

-By reducing the contribution of food-based biofuels to meet the EU’s renewable target: from 7.0% in 2021 to 3.8% by 2030.

-By increasing the share advanced biofuels, fuels coming from renewables and waste, from 1.5% in 2021 to 6.8% by 2030.

-And by introducing strengthened sustainability criteria for biomass.

For consumers, the new Directive will enable consumers to produce their own renewable electricity more easily, while ensuring they are paid for electricity they feed into the grid.

Third, we are overhauling Europe’s electricity market.

And we do so mainly in two ways:

-First, by changing the rules to make the market fit for more renewables, setting price-signals for investments rather than subsidy-signals, and increase competition to the benefit of consumers.

The new market rules sharpen price signals and promote a more flexible market. Our proposals will boost trading across borders, create a level-playing field for renewables, and remover barriers for new actors in the market.

And second, by fostering regional cooperation.

We create Regional Operational Centres, where TSOs will have to cooperate to fulfil a number of tasks jointly, and a EU-wide DSO entity to coordinate the operation and planning of the transmission and distribution networks

We develop common rules on crisis prevention and tools to ensure cross-border cooperation.

We establish a common European framework for capacity remuneration mechanisms to ensure coherence, cross-border participation and avoid market distortions.

Cooperating on security of supply in this manner can save us 4.8 billion € of investment every year. And I want to be very clear on one more point: we will not support fossil fuels neither directly nor indirectly.

Capacity mechanisms will not be used as a backdoor subsidy of high-polluting fossil fuels; that would go against our climate objectives.

That is why we have set a limit of 550 grams of carbon dioxide per kilowatt-hour for new plants, and give time to existing clear capacity mechanisms to adapt to the new rules.

This is a comprehensive package full of ambitious measures that will help us reach our 2030 energy and climate objectives and our commitments under the Paris Agreement.

With these proposals, the Commission has cleared the way to a more competitive, modern and cleaner energy system. Now we count on European Parliament and our Member States to make it a reality.

This is a copy of the speech made by EU climate commissioner Miguel Arias Canete at the launch of the EU Winter Package

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