The energy for change

As commissioner for Energy, Günther Oettinger is coordinating a European energy policy that involves close cooperation with other DGs and in particular the new Climate Action and Transport commissioners. Here he talks to William Davis about the challenges he sees ahead.

William Davis: Did Europe take enough of a lead at Copenhagen in driving through ambitious enough greenhouse emissions targets and how will a commitment to fast-start financing for developing countries actually be realised?

Günther Oettinger: The EU has always taken the lead when it comes to climate policy, and that was also the case in Copenhagen. We have shown our commitment through our unilateral emissions reduction target of 20 per cent below 1990 levels and pledged to scale up this reduction to 30 per cent provided other major emitters would follow, and through the adoption of an ambitious climate and energy package. The fact that so many countries have subscribed to the Copenhagen Accord is a meaningful sign: climate change is being recognized as a major challenge globally now.
As to the fast-start financing, the December European Council set the contribution of the EU and its Member States at €2,4 billion yearly for the period 2010–2012. We will need to build on existing initiatives to the extent possible for this fast-start funding to be effective, and we will work closely together with the Member States to maximise synergies.

WD: Instead of pledging a 30 per cent reduction in emissions if international agreement is reached, would it not have been better, as one of the world’s leading polluters, for Europe to take the lead and set this target unilaterally – wouldn’t that be a step towards the “Europeanisation” of our energy policy?

GO: We have to be realistic when talking about targets. Reductions in the EU alone will not solve the global climate change problem. We need an international agreement that is both binding and sufficiently ambitious, and in which all countries do their part. The European Commission is currently analysing what policies and measures would be needed to achieve a 30 per cent reduction, and we will set out the appropriate strategies accordingly. As to the "Europeanisation" of our energy policy, indeed the new Lisbon Treaty provides a sound basis for this. Only through a strong European energy policy will it be possible to reach our objectives, not just in the climate area but also regarding competitiveness and security of our energy supplies.

WD: How do you plan to ensure Europe achieves all its energy ambitions, but maintains its competitiveness in the global economy?

GO: Achieving our energy ambitions is essential to maintaining and strengthening EU competitiveness in the global economy. That is why the energy and climate targets (20 per cent greenhouse gas emissions reduction, 20 per cent share for renewable energy and 20 per cent improvement in energy efficiency, all by 2020) have been integrated into the Commission's Europe 2020 Strategy. Particularly at this time of economic instability, the EU's medium-term energy policy framework gives industry the confidence and certainty to invest in tomorrow's technology and infrastructure.
In the future, those economies which have managed to reduce their carbon footprint, and diversify away from finite fossil fuels will be the best placed to maintain sustainable economic growth. The international market for energy efficiency is already worth over €500 billion per year, and by 2020 the market for low-carbon electricity could be worth well over €600 billion. The EU's energy technology strategy will help prepare EU companies well to compete in this booming marketplace.
The internal market, together with new market-based instruments such as emissions trading, offers a solid basis on which to develop strategies for sustainable energy supply and demand in economically sound ways. The internal market will also make it more attractive for companies to invest in new infrastructure and networks, in the knowledge that the EU energy market gives them access to over 500 million potential consumers.

WD: How will splitting the DGs in your portfolio, into DG Energy and DG Climate Action, impact of overall EU energy policy and does the split indicate a change in direction for the Commission? What does it signal?

GO: By creating a new Climate Directorate General, the Commission is better able to ensure that climate strategy and goals permeate the full range of EU policies and measures. The new Energy Directorate General will work closely with all the other relevant services, including Climate and Transport, to ensure that the strategic importance of energy policy is well represented. As Energy Commissioner I will also have responsibility for the whole spectrum of energy policy, including external energy policy and energy research. Energy policy is now more important than ever before to the EU, and the decision to have a dedicated DG reflects this.

WD: Apart from climate change, what do you consider to be your greatest challenges as the commissioner for Energy in both the short and long term?

GO: My first challenge is to ensure full and effective implementation of existing legislation and rules in all areas of energy policy: security of supply, competitiveness and the internal market, technology, energy efficiency, renewable energy and nuclear safety. Implementation of the internal market legislation has been particularly slow and must be speeded up.
Delivering the 2020 targets will be a major challenge without new measures. For renewables, we are more or less on course, providing Member States continue to build up their efforts. But on energy efficiency, progress has been less favourable. Under the Spanish Presidency we will have a debate on how to prepare the next Energy Action Plan. This has to set us firmly on course to reach our 2020 goals. It should also include a new Energy Efficiency Action Plan. The Commission has also set out a vision to decarbonise energy, including the electricity and transport sector, by 2050. This requires major structural and behavioural changes across society over a relatively short period. To tackle the challenges this implies, the Commission will present a 2050 Roadmap early 2011.
Another challenge, particularly in today's economic climate, is to stimulate the investments in technology and infrastructure necessary to deliver our goals. I will complete work as soon as possible on a new Energy Infrastructure Instrument, as well as speed up implementation of the Strategic Energy Technology Plan. But this raises another issue: how to ensure that EU budgets are adequate to the task in hand.
Finally, as I mentioned earlier, we need to develop a truly European approach to energy policy. We need to bring Member States together on international issues and agree processes to ensure that EU and national positions are coherent, including an EU voice in international negotiations.

WD: How will you be working towards securing Europe’s energy future and is this achievable in every corner of the union?

GO: When we talk of Europe's energy future, we mean a secure, sustainable and competitive future for every European citizen, wherever they live. This is why the internal market is so important, as the rights, obligations and benefits must apply throughout the EU.
To make sure the market works to this end, we need to set up networks. We already have "soft" networks of energy agencies and technology promotion offices.
These networks will be complemented by the European Networks of Transmission System Operators for electricity and gas and by the EU Agency for the Cooperation of Energy Regulators (ACER).
We also need "hard" networks – infrastructure, grids, networks and demand technology. For this reason, I will be working on ways to encourage investment in more interconnections, to ensure that all parts of the EU market are properly interlinked. Here, the cases of the Baltics, Ireland, the Iberian peninsula and islands are particularly relevant. I am also promoting a vision of an intelligent energy network for Europe, including "smart grids’. This will make it easier for all customers to produce their own energy and to manage their energy demand, thus saving costs and reducing the environmental impact of their energy use.

WD: Research and development is obviously key to achieving much of what you have set out to achieve as commissioner. What emphasis have you put on this and which areas of research do you consider most relevant now?

GO: The secure, sustainable and competitive energy system that we need for Europe, will require a technology shift towards low carbon options. These low carbon options need to be developed and made competitive to become a truly market choice.
The European Strategic Energy Technology Plan proposes a simple, straight-forward method on how to get organized in Europe and also globally with our partners. European research efforts, both at Member States and at EU level, have had outstanding results in developing technologies which contribute to reducing greenhouse gas emissions, reducing our dependence on imported energy and help job creation and competitiveness. Our low-carbon energy industry today, has produced 1,4 million jobs, a figure that could double by 2020, and exports of a value of 3,7 b€.
While currently approximately €3 billion are being invested annually in the development of low-carbon technologies, the estimation made by the Commission in the SET-Plan of the public and private investment needs should be €8 billion a year.
The Strategic Energy Technology Plan has already led to real changes in the way that the EU pursues energy research. We are more focused and more effective in the way we use the EU's budget. To accelerate this process the plan proposes the European Industrial Initiatives in wind, solar, bio-energy, carbon capture and storage, nuclear, smart grids and smart cities.
Together with industry, research communities and Member States we have started to feature research and demonstration programmes for these energy technologies. We have developed the Technology Roadmaps covering the period 2010–2020 and the European Industrial Initiatives will be launched at latest by 2011.
The Strategic Energy Technology Plan will remain flexible and other technologies that deserve European level intervention will, most likely, emerge over time.

Published: Wednesday, 1st September 2010 by William Davis