5 May 2015

EU Energy Union – When will it happen?

The ‘EU Energy Union’ is one of the key priorities of the new European Commission. The strategy is based on the three long-established objectives of EU energy policy: security of supply, sustainability and competitiveness.
To reach these objectives, the Energy Union focuses on five mutually supportive dimensions: 1) Energy security, solidarity and trust, 2) A fully integrated European Energy Market, 3) Energy efficiency contributing to moderation of demand, 4) Decarbonizing the economy, and 5) Research, Innovation and Competitiveness.
On 19-20 March 2015 the meeting of the European Council fully endorsed the Commission’s approach. In terms of delivering the Energy Union, the strategy includes a roadmap with fifteen concrete action points with a clear timetable for adoption and implementation as well as respective responsibilities.
First, the Energy Union aims to create a fully integrated European energy market. Energy is still predominantly a national prerogative in the EU; energy markets still have a strong national focus with the important energy decisions taken at national level. So, how does the Energy Union contribute to the creation of an internal energy market? How is this related to Europe’s role on the global energy markets? 
Increasing cross-border connectivity is one of the key objectives of the Energy Union proposal, however this will require an enormous investment by Member States for many years to come at a time of economic crisis and severe budgetary constraints.
Furthermore, the implementation and execution of existing energy legislation, notably the Third Energy Package, has not yet been completed. There is a risk that the focus on the Energy Union – which is borne out of strong concerns about the viability of the EU’s energy supply – will ‘distract’ countries and hamper the implementation of the Third Package. 
At the same, the Energy Union is indisputably linked with the EU’s climate policy. The EU is in the process of reforming its ETS regime and hopes to adopt ambitious climate targets at the COP21 meeting in Paris at the end of this year. This policy is based on the EU Emissions Trading System (ETS), green-house gas reduction targets for the sectors outside ETS, and an energy policy to make the EU number one in renewable energy.
It will be a challenge to create sufficient synergies between the EU’s climate policy and the Energy Union and to ensure that the climate policy contributes to securing Europe’s energy supply.
Energy efficiency is another important pillar of the Energy Union with the EU target set at 27% or greater by 2030. As stated in the communication, energy efficiency must be treated as an energy source in its own right, representing the value of energy saved. Whether it is by means of smart grids, cities, buildings or transport, digital companies are increasingly important to help developing innovative solutions to reduce energy consumption and related greenhouse gas (GHG) emissions. To which extent can digitization contribute to solving some of the current energy challenges? Is this mainly the case for energy efficiency or can it also be relevant for the other pillars of the Energy Union? If so, how?
We can say the EU Energy Union Strategy is both a culmination of the increasing integration of national energy policies as well as a milestone upon which further integration will take place and new legislation will be proposed as of 2016. It aims at providing answers to the current energy challenges via concrete action points. Nevertheless, there are however possible pitfalls that need to be properly addressed.
This topic will be debated at the European Business Summit on 6th and 7th of May.

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