A new deal for Europe’s energy transition
Energy is affecting all of our economies and 100% of our populations day and night. It plays a key role for our security, our competitiveness, but also our environment and comfort of life.
In the light of the on-going Russia-Ukraine tensions, European energy security cannot be taken for granted and at the same time, with the liberalisation of the energy market, ambitious climate and energy targets, and new technologies we are moving towards a more decentralised, sustainable, and smarter power system.
In this rapidly evolving landscape, our main goal is clear: We need to provide Europe’s citizens and businesses with the secure, sustainable, and affordable energy they need.
Adaptations, notably of the internal market, are necessary but a fundamental change in the role consumer play in the market is also indispensable, supported by the regulatory framework but also facilitated by new technologies. These are also the main tasks of the Energy Union.
Last year in February, the Commission adopted its Energy Union Framework Strategy built around five dimensions: Energy security, solidarity and trust; the internal energy market; energy efficiency as a contribution to the moderation of energy demand; decarbonisation of the economy; and research, innovation and competitiveness.
But in 2015, we have not only defined a long term vision, we have also started implementing it: In July, the Commission came forward with the first deliverables, in particular a legislative proposal for ETS reform, a proposal for a framework legislation on Energy Labelling, as well as a consultative Communication on energy market design and a Communication on a “new deal” for energy consumers.
The overall aim of the “new deal” for energy consumers is to give consumers the tools they need to be active participants and enable them to control their consumption, lower their bills and benefit from new smart energy technologies.
This highlights the need to better connect the retail and wholesale energy markets in order to give consumers access to flexible tariffs. But it also means allowing them to benefit from new technologies to control their energy consumption. Consumers should be able to react to energy prices, and decide where and when to consume energy. Using smart grids and home energy management systems to intelligently manage the energy consumption and costs will not only benefit energy consumers, but will help modernise our energy systems while creating growth and jobs.
Furthermore, rapidly falling technology costs mean that more and more consumers could reduce their energy bills by using technologies such as rooftop solar panels or heat pumps. In this perspective, we need to put the necessary enabling legal framework in place.
Later on, in November, the Commission came forward with the first annual State of the Energy Union, assessing the first results of delivering on the Energy Union. It included one very important message: If we want the on-going energy transition to be successful, it has to be consumer-centred but, very important, also socially fair.
The fact that in 2014, one in every ten EU citizens felt being unable to keep their homes warm shows that action is needed.
In that context, the European Parliament voted successfully for the report, ‘A New Deal for Energy Consumers’ (Griffin report) on May, 25 2016. It calls for the end of termination fees when switching to cheaper suppliers, simplified energy bills, guidelines to ensure suppliers notify customers when cheaper tariffs exist and for affordable energy to be a basic social right.
The Commission agrees with the Griffin report that energy efficiency measures are key for addressing energy poverty.
The Commission is already working to create the appropriate framework for decentralised generation and self-consumption of renewable energy in the Market Design Initiative and in the revision of the Renewable Energy Directive foreseen for the end of the year, taking of course into account the cost-benefit.
Moreover, the Commission will present later this year an Energy Efficiency package including the revision of the Energy Efficiency Directive (EED), the Energy Performance of Buildings Directive (EPBD) and a Smart Financing for Smart Buildings initiative. Buildings are the largest energy consumer and crucial also for boosting the construction sector, economic growth and jobs.
2016 is a key year of delivery for the Energy Union. At the end of the year, the Commission will have proposed a set of key initiatives that will define the energy landscape for the next years. The place of consumer will be more than ever at the heart of its policies.