“Views of the Magritte Group on the Energy Winter Package 2016 “Clean energy for all Europeans”
Three years ago, the Magritte Group1 gave European policy makers a significant wake- up call, reacting to the lack of visibility and regulatory uncertainty of the European energy policy. Since the very beginning of the Juncker Commission, our companies welcomed the Energy Union as the coherent and sound regulatory framework expected by the energy sector. In this respect, the so-called “Clean Energy for All Europeans” package published on the 30 November 2016 constitutes an important milestone. Our companies fully support the European Commission efforts towards a more integrated Energy Union and market-based solutions which are very much welcomed in light of the challenges faced by the energy sector and the need to meet the EU climate and energy objectives for 2030.
The objective of providing smart and clean energy to all consumers heralded through these legislative proposals requires a total involvement of the whole energy sector. As European utilities, it is our role to fulfill energy demand, innovate and develop customer- oriented solutions first and foremost. As such the European lawmakers should seize the opportunity offered by the European Commission’s proposals to provide the energy sector with the correct framework to invest in the energy transition, notably through low carbon technologies, storage and demand side response, integration of energy and data, as well as tools that empower consumers. Besides, as the proposed energy efficiency target displays a high level of ambition, EU policymakers should make sure that it can be turned into business opportunities in the field of energy solutions, which entails a huge potential for growth and new jobs, provided that financial mechanisms are available to support investment efforts in this sector.
At the same time, we also expect the implementation of this new target to be fully compatible with the revitalization of the EU Emissions Trading Scheme (EU-ETS) and renewable energy objectives. Our companies also ask that appropriate mechanisms are put in place to make sure the market sends the right signals for sufficient and flexible capacity. Such flexibility is needed to accommodate the increasing participation of variable renewables. Policymakers should make sure that these legislative proposals are implemented in a level playing field and in the most cost-effective manner in all Member States.
This will require:
1) Keeping a strong political impetus in the upcoming reform of the EU-ETS. A well- functioning EU-ETS is critical to make the energy transition possible in a cost effective manner, while providing the private sector with clear and robust price signals to invest in low carbon and carbon free technologies. It is paramount to scale up the level of ambition of the EU-ETS now, in order to align it with the EU long term climate commitments enshrined in the December 2015 Paris agreement.
2) Making sure that a renewed power market design provides the meaningful and sustainable short term and long term price signals required to reduce the gap between the missing investment perspectives in European electricity markets and the need for flexibility and capacity in the power system. The legislative proposals on a new European market design provide a unique opportunity to set up a consistent and sound set of principles to foster the transition towards a low carbon economy whilst guaranteeing security of supply and decarbonisation at an affordable cost for the consumers and in a competitive manner.
3) Defining common rules on renewable support schemes and a clear schedule for tenders also allowing Member States to optimize integration of all renewable energies into the grid. A European framework should underpin national ambitions in renewable energy development while providing legal certainty to the economic agents. Our companies remain fully committed to achieving the goals set at European level and to the continuation of a fruitful dialogue with all relevant European authorities.