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Europaudvalget 2014-15 (1. samling)
EUU Alm.del Bilag 82
Offentligt

Council of the

European Union

Brussels, 10 November 2014

(OR. en)

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CO EUR-PREP 44

ENER 451

POLGEN 155

NOTE

From:

To:

Subject:

Presidency

Permanent Representatives Committee/Council

EC follow-up: Thematic debate on Strategic Agenda priorities - Towards an

Energy Union with a forward-looking climate policy

This note sets out the state of play on some of the main orientations relevant to the third priority

area of the Strategic Agenda adopted in June 2014, Towards an Energy Union with a forward-

looking climate policy. It aims to provide the Council with an overview of progress achieved on

relevant policies and to serve as a first basis for discussion on further steps required in this area.

The discussion will be focused on the following questions:

1. What is the assessment of the ministers regarding the progress achieved so far?

2. Is there scope to improve the follow-up, both at national and European levels, and how?

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The EC regularly addresses energy issues, for instance with thematic sessions in February 2011

and May 2013 and three times in 2014 including when deciding on the 2030 climate and energy

framework. While the climate component of the framework calls for some reflection before any

meaningful new initiative can be developed and reported it makes also sense to take stock of the

energy component as, on the one hand, the 2014 deadline for the completion of internal energy

market is nearing and, on the other hand, the broad priorities set by the EC (internal market,

infrastructure, energy efficiency, energy security) stay largely unchanged irrespective of climate

policy albeit with varying importance e.g. in reaction to external events or economic circumstances.

Internal Energy Market (IEM)

Based on Commission's mid-October comprehensive stocktaking many positive results have

been delivered towards the completion of the IEM by 2014:

•

regulatory framework is in place and largely transposed

•

wholesale electricity prices declined by one-third and wholesale gas prices remained stable

between 2008 and 2012

•

consumers have more choice when it comes to picking an energy supplier

•

cross-border trade in gas and electricity between EU countries has increased. Gas pipelines

are also being used more efficiently thanks to common rules on the use of gas networks

•

EU legislation makes sure that energy companies cannot exclude competitors from access

to pipelines or withhold the construction of important infrastructure. EU rules also

guarantee fair trading on wholesale markets and prevent price manipulation.

Further steps, mostly in the hands of Member States and regulatory authorities, need however

to be taken:

•

the implementation of harmonised rules across Europe for gas and electricity trading

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•

government intervention should only happen when secure energy flows cannot be

guaranteed by the market

•

a stronger emphasis on regional cooperation to bring faster results and to better address

local needs

•

consumers should become more active players in the energy market

•

retail and wholesale markets should be better linked so that lower wholesale prices lead to

lower consumer prices

•

increased cooperation between gas and electricity European Networks of Transmission

System Operators and between TSOs and Distribution System Operators (DSOs).

Energy efficiency

Based on the Commission's assessment of last July the current legal framework, and notably

the Directives on the Energy Performance of Buildings (EPBD) and on Energy Efficiency

(EED), should allow the EU to achieve energy savings of 18-19% in 2020; however, the 20%

target for 2020 can be reached if all EU countries fully implement the already agreed

legislation. It is recalled that the October EC retains an indicative EU-level target of 27% by

2030, to be reviewed in 2020 with a target of 30% in mind.

As examples of benefits of current energy efficiency policies one could note:

•

Energy intensity in EU industry has decreased by almost 19% between 2001 and 2011

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•

More efficient appliances like refrigerators and washing machines are expected to save

consumers EUR100 billion annually – about EUR465 per household – on their energy bills

by 2020

•

New buildings consume half as much energy today as they did in the 1980s

•

New opportunities and jobs for European businesses such as construction firms and

equipment manufacturers.

The main challenges to be addressed concern:

•

the incomplete transposition of the EPBD and EED

•

the need to strengthen verification of national building codes and accurately inform

consumers of the energy performance of buildings for rent or sale

•

fuller implication of utilities in working with their customers to obtain energy savings

•

the access to financing especially in the residential sector where is the largest potential:

although significant amounts e.g. from the ESIF could be devoted to energy efficiency

projects it remains difficult actually to mobilise these funds and to have financing

institutions being willing to invest in what are often small-scale projects with long-term

returns.

The next major step will be the review of progress on the Energy Efficiency Directive by

mid-2016, which could be the opportunity to reconsider its targets for the post-2020 period.

The Commission is also invited to propose priority sectors in which significant efficiency

gains can be reaped and ways to address them at EU level.

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Infrastructure

Based on Commission's mid-October comprehensive stocktaking positive results have been

delivered on infrastructure, which will contribute to meeting the 10% and 15% targets set by

the October EC for interconnections:

•

many missing infrastructure links between EU countries have been built or are under

construction

•

248 projects of common interest have been selected last year under the 2013 Regulation on

Trans-European Networks. The European Energy Security Strategy prioritizes 33 projects.

In the last week of October the CEF Committee decided that 34 projects will receive EUR

674 million under the first CEF call: the bulk of the money supports gas projects in the

Baltic region as well as in Central Eastern and South Eastern Europe.

Further steps, some mostly in the hands of Member States and national regulators, need

however to be taken:

•

more investments in gas and electricity infrastructure including smart grids, focusing on

ending the isolation of certain Member States and diversifying suppliers. By 2020, three

quarters of the EU's infrastructure PCIs should be completed.

•

the 2nd list of PCIs under preparation (PCIs lists are revised every two years) will further

contribute to meeting the interconnection targets

•

political support and commitment at regional and local level is needed in order to facilitate

public acceptance and accelerate permitting procedures which are often delaying the

completion of projects

•

improve access to financing (e.g. public-private partnerships to increase the leverage of EU

funds)

•

increased planning coordination between Member States in a regional setting, with TSOs

and regulators including relevant projects in the next 10-year network development plan.

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Several steps are also in the hands of the Commission, with the support of Member States, as

called for by the October EC:

•

ensure the achievement of the 10% electricity interconnection, with special focus on

selected Member States, report on possibilities of EU financing and, if appropriate, make

proposals

•

identification of new projects if necessary to reach the 10 % target and include them in the

next list of PCIs

•

present a Communication by March 2015 on how to achieve the 10 % target

•

report on the objective of arriving at a 15% target by 2030.

Energy security

All the actions mentioned under points 1 to 3 above do contribute to energy security. Besides,

the October EC noted further actions, especially in relation with short term measures and

emergency situations:

•

better use of regasification and storage capacity

•

protection of critical infrastructure

•

improve exchange of information, including with respect to intergovernmental agreements

and encourage recourse to Commission's assistance during negotiations

•

strengthen the Energy Community

•

use foreign policy instruments to convey messages on energy security.

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In preparation of the October EC and as an effective follow-up to the June EC on energy

security it is worth noting the Commission Communication on the short term resilience of the

European gas system, not only as a good example of collaboration between Commission and

Member States when it comes to addressing collective security challenges at short notice but

mostly for its wake up call: although the situation is markedly better than in 2009 a prolonged

gas supply disruption could have a substantial impact on the EU. A number of short term

measures, within the existing regulatory framework and largely in the hands of Member

States, can however help reduce consequences:

•

countries should follow a market-based approach and avoid interventionist measures

•

countries should increase energy coordination with each other as regards use of

interconnection and removal of restrictions to cross-border energy trade

•

responsibility should be shared between public authorities and industry through the

implementation of the EU's Security of Gas Regulation

•

short-term behavioural changes should be enacted to boost energy efficiency and lower

demand.

In a longer term perspective, diversification of routes and suppliers, which starts at home with

the development of domestic resources (fossil and non-fossil), should be pursued. The

continued increase of renewables with an agreed binding EU-level target of 27% by 2030 is a

major contribution in this respect, coming on top of the good progress made towards the 20%

target for 2020.

Further actions for the medium term (end 2015) are noted in the Commission Communication

as well as medium- and long-term ones in the presidency's report noted by the EC.

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Climate

On October 23rd the European Council agreed on the 2030 climate and energy framework

and specifically on a EU binding target of at least 40% domestic reduction in Greenhouse gas

(GHG) emissions by 2030, an EU target of a share of at least 27% of renewable energy

consumed in the EU in 2030 and an indicative target at the EU level of at least 27% for

energy efficiency in 2030.

The EC Decision is consistent with the EU objective, in the context of necessary reductions

according to the IPCC by developed countries as a group, to reduce emissions by 89-95%

compared to 1990.

According to the timeline decided at the 19° Conference of the Parties of the UNFCCC in

Warsaw last year, the EU will submit its contribution at the latest by the first quarter of 2015

and urge all other Parties of the UNFCCC to do the same. In this context, it is of paramount

importance the adoption of the implementation rules for the second commitment period of the

Kyoto Protocol.

Later in 2015, at the 21 COP in Paris, an ambitious, comprehensive and legally binding

agreement must be reached. To this effect, the 20th COP in Lima must deliver a balanced

package of decisions, including strengthening the implementation of decisions taken in the

past years as well as advancing work under the Durban Platform for Enhanced Action by:

reaching a decision on upfront information requirements and a process to consider and

analyse for Intended Nationally Determined Contributions; agreeing the key elements of a

draft negotiating text for the 2015 agreement; and closing the gap in the pre-2020 mitigation

ambition.

_____________

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