By Miguel Arias
In reality, the level of investment and new projects is moving more quickly than the gathering of statistics! The key point is that renewable energy is now cost-competitive and becoming more and more frequently cheaper than fossil fuels. With 12,5 GW of gross additional wind capacity installed in 2016, wind has now overtaken coal as the second main source of energy in Europe (after gas) and the EU remains the second largest market for wind power (after China).
Figures for 2016 from the renewables agency, IRENA, show that the level of power capacity from renewables continues to increase, with a global increase of 9% last year, relative to 2015. In Europe, the level of growth in 2016 was around 5% and this is in good part because the EU is already doing more than others. Per capita, the EU has installed four times more renewable power than the rest of the world (0.8 kW/capita versus 0.2 kW/capita) – and twice much as China (0.4 kW/capita).
In total, the renewables sector in Europe employs over one million people, attracts more investments than many other sectors, and has reduced our fossil fuels imports bill by €16 billion since 2005.
On top of that, whereas in the past we used to see a clear link between energy consumption and GDP growth – with any rise in GDP only possible with an increase in energy consumption. In recent years we have managed to fully decouple these two elements. Whereas GDP grew by some 10% from 2005 to 2015, primary energy consumption decreased by almost 11% in the same period. The signal is clear – cleaner energy and economic growth can go hand in hand.
In short, this is not just a transition, we are truly undergoing a clean energy revolution. And our job as policymakers is to see how we can steer and accelerate this process most efficiently by creating the right regulatory and enabling framework.
And this brings me nicely on to my second point – the most important global achievement since we met in Brussels this time last year – the ratification of the Paris Agreement. The Paris Agreement was a remarkable, perhaps unique exercise in collective responsibility to slow down global warming to well under 2 degrees; 195 parties working together to establish the most efficient vehicle for fighting climate change. Sealed by the EU ratification of the deal, the moment that this accord came into force was one of the most fulfilling moments of my political career. This is why, I will do whatever it takes to defend and implement it.
Of course, the EU deeply regrets the unilateral decision of President Trump to withdraw the USA from the Paris Agreement. In our response, we have made clear that the 29 articles of this accord are not up for renegotiation. The Agreement is ratified. It is fit for purpose. It is here to stay.
I was touched by the stance taken by many cities around the world and the number of green-coloured town halls that were pictured on social media. Perhaps this is a good chance to acknowledge the role that can be played by cities and local authorities in this contest. A good instrument to make this happen is the Global Covenant of Mayors, which should become fully operational in the course of this year.
Such a single, global coalition of cities is important for a range of reasons, but I will mention only one: cities and regions can inspire each other and learn from each other’s best practices. In other words: our cities can team up with cities in other continents to jump over the fossil age.
And I imagine that my fellow speaker Daniel Termont, the Mayor of Gent, who is on the Board of the European covenant of mayors, will talk about this shortly.
As European Commissioner responsible also for Climate Action, I will work relentlessly to forge news partnerships around the world, from the world’s biggest economies to the most vulnerable developing countries, supporting and helping them to adapt and mitigate climate change,
A good example of this renewed partnership is China. Climate action was a key topic of the EU-China Summit that took place here in Brussels on the 2nd of June. In September, I will co-host a major gathering with my Chinese and Canadian counterparts to implement Paris and accelerate the clean energy transition.
We are also reaching out to our partners in the African Union and among the African, Caribbean and Pacific (ACP) countries with whom we adopted joint statements expressing our common resolve. And we will work hard to have a clear message coming out of the G20 summit in July – or at least from the group of 19 that shares our common goal.
Also, just two weeks ago, the 8th Clean Energy Ministerial and Mission Innovation Coalition meetings were gathering participants from different parts of the world. The Commission represented the EU to discuss sustainable energy policies, clean energy innovations and technologies. I am glad to confirm that next year’s Clean Energy Ministerial meeting will take place in Europe, and will be organised by the Nordic countries in cooperation with the European Commission.
But first and foremost – and that brings me on to the third point I would like to cover – we, the EU, are putting in place our own ambitious domestic energy and climate change policies and setting the conditions right to steer the necessary investment in the clean energy transition thanks to the Clean Energy Package.
I see the Clean Energy for all Europeans package as the way of cementing the EU’s Paris Agreement commitments into our rulebook.
The key here is creating the optimal conditions for energy transition, not only by setting the necessary regulatory framework, but also, by driving the necessary investments – both public and private – to support this transition. This time the commission took a different approach by going beyond regulation, and by developing, at the same time, the enabling instruments and support measures that would be needed to reduce Green house gas emissions by at least 40%, to achieve energy efficiency target of 30% and to reach the level of at least 27% of renewable in our final energy consumption.
As a matter of facts, the EU will help with investments in structural projects, research, and other areas of spending, such as financial instruments. I was pleased to see a figure recently that for every 1 Euro of public money, we see between 13 to 20 Euro of private investment.
As you know, in the building sector, the Smart Finance for Smart Buildings initiative will unlock private financing by supporting a more effective use of public funds, aggregation and assistance for project development, and a change in the risk perception of financiers and investors.
Regarding project financing, projects approved in the field of energy – with a priority on energy efficiency, renewable energy and energy infrastructure – represent already 24% of the total financing approved by the European Fund for Strategic Investments (EFSI). And I am confident that this is going to increase significantly in the future. The European Structural and Investment Funds (ESIF) will invest € 17 billion in energy efficiency during the period 2014-2020.
The issue of financing is already playing an important role in the current discussions with the co-legislators about the Clean Energy package. This is why, together with President Buzek, we have decided to organize a High Level Conference – end of November – in the European Parliament to discuss “How to finance the Energy Transition”. You are already all invited to attend!
Coming back to the proposals of the Clean Energy package, I remain confident that we can reach a political agreement with the European Parliament and with Member States in relatively short time.
In this context, I would like to highlight a few elements, starting with Energy Efficiency, the most mature file, at least in Council. As you know, the Maltese presidency is working in order to achieve a general approach at the occasion of the next Energy Council, end of June.
In this respect, I would like to be clear: energy efficiency is not a slogan, it is one of the most cost effective ways to support the transition to a low carbon economy and a key policy to implement the Paris Agreement. Besides, it is also an effective way to create investment opportunities, growth and employment domestically. According to our estimates, the 30% energy efficiency target will increase Europe’s GDP of €70 billion, create about 400,000 new jobs – especially among SMEs – and reduce our gas imports by 12% by 2030.
Moreover, the binding nature of the target will provide additional certainty to the investors. Many industry representatives are fully in line with an ambitious binding target, to have more predictability.
After the productive discussions that we had in Malta at the occasion of the informal Energy Council, I am happy to see more and more Member states moving in our direction.
But ambition is not only about the target, it is also about the requirement for Member States to make annual savings of 1.5%, foreseen by article 7. This is a core provision, since through it we achieve about half of all the savings of the Directive.
How can we explain to our citizens that undergoing energy transition and combatting climate change is more important than ever, and yet we lower the existing requirements? This makes no sense.
Of course, I recognize the need for more flexibility, notably as far as renewables are concerned, but this should not lead to the creation of loopholes in the legislation and should not be at the expenses of the level of ambition.
If that will be the case, I would rather be in favour of giving our self more time, to work out a better compromise.
Another key point is the need to improve the energy performance of buildings, given that this accounts for 40% of Europe’s energy consumption and 36% of CO2 emissions. Significantly accelerating the rate of building renovation has the potential to help more families move out of energy poverty, and to improve the quality of life for many – as well as stimulate jobs in particular for local SMEs.
In this context, our proposal for pre-cabling and charging points for electric vehicles in new and existing buildings – and the recent mobility package – should help to address one of the key bottlenecks holding back electric vehicle growth in Europe. On this specific issue, I regret that as far as charging points are concerned the council compromise will reduce the level of ambition by more than 95% compared to the Commission original proposal. I look favourably at the work ongoing in the European Parliament and I hope that we will be able to bring back a certain level of ambition here.
Also because by the end of the year we will adopt the post 2020 emission standards for cars and vans and, there, we are considering options to set a dedicated target for zero and/or low emission vehicles. And of course the availability of charging infrastructure is going to be essential for the penetration of these vehicles into the market.
As far as the rest of the package is concerned, the work is proceeding well both in Council and in Parliament where I am working very closely with all rapporteurs and shadows. In this context, I attach a lot of importance to two main elements: first, preserving the consistency between the different proposals of the Package and second, ensure that the legislation that we will adopt will be enforceable.