February 2017

What is the problem?

The European Energy Union

Europeans need secure, sustainable and affordable energy. Our way of life is such that energy is vital for essential day-to-day services, without which we and our businesses cannot function. We need it for our lighting, heating, transport and industrial output. In addition to our basic needs we also need it for our washing machines, computers, televisions and all the other goods that we now use almost without thinking. However, making sure we have all the energy we need, at a price we can afford, both now and in the future, is not so easy. Our main problems are as follows.

Interconnecting markets

We depend on imports for more than half of our energy

The European Union consumes one fifth of the world’s energy, but has relatively few reserves of its own. This has an enormous impact on our economy. The EU is the largest energy importer in the world, importing 53 % of its energy at an annual cost of around €400 billion.

Our dependence on a limited number of countries to supply our energy leaves us vulnerable to disruptions. We have seen this in the past, for example when some countries were cut off from supplies of gas.

We have to look into new, renewable and clean sources of energy such as electricity generated from wind, water and sunlight by using wind turbines, dams and solar panels.

Europe also wants to stay competitive as global energy markets move towards cleaner power. The EU wants not just to adapt to this transition to clean energy, but to lead it.

We don’t have a Europe-wide infrastructure in place

Many electricity grids and gas pipelines are built for national purposes and are not well connected across borders. Electricity and gas should be able to flow freely through the grids which criss-cross Europe.

Energy also has to be transported, sometimes across continents or under the sea, to the place where it will be used. That requires a network of power plants capable of producing an uninterrupted energy supply for many decades. This means that massive technical, logistical and financial resources are needed.

However, lack of access to a Europe-wide market puts investors off from investing in energy infrastructure. As a result, investments in new power plants to replace old and outdated ones could be delayed.

What is the EU doing?

The EU's 2030 goals for climate and energy

Since 2010 the EU has had a target of reducing its greenhouse gas emissions by at least 20 % by 2020, increasing the share of renewable energy to at least 20 % of consumption and achieving energy savings of 20 % or more.

Through reaching these targets, the EU can help combat climate change and air pollution, decrease its dependence on foreign fossil fuels and keep energy affordable for consumers and businesses.

Based on the progress achieved so far, the EU is well on track towards its 2020 renewable energy target. The share of renewable energy was already at 16 % in 2014.

Transition to a clean energy

The EU Heads of State or Government have also agreed a target of at least 27 % for renewable energy by 2030.

EU countries have agreed a target of at least 27 % for energy efficiency by 2030 and a reduction of greenhouse gas emissions by at least 40 %.

In February 2015 the European Commission set out its energy strategy to ensure that the EU is able to meet its challenges. The strategy focuses on five key areas:

  • securing supplies;
  • expanding the internal energy market;
  • increasing energy efficiency;
  • reducing emissions;
  • research and innovation.

Securing supplies

The EU must become less dependent on energy from outside its borders. This means making better, more efficient use of our domestic energy sources while diversifying to other sources and supplies.

In February 2016 the Commission presented a package of measures for energy security, which will minimise interruptions to supply. For the first time, it introduced a solidarity principle according to which, as a last resort, neighbouring Member States will help ensure gas supplies to households and essential social services in the case of a severe crisis.

Expanding the internal energy market

Energy should flow freely across the EU, without any technical or regulatory barriers. Only then can energy providers freely compete and provide the best energy prices for households and businesses. The free flow will also make it easier to produce more renewable energy.

In 2016, €800 million was made available for cross-border energy infrastructure under the Connecting Europe Facility. A total of €5.35 billion has been allocated for the period 2014-2020.

This money is being invested in projects such as the Balticconnector — the first gas pipeline connecting Finland and Estonia. When the gas starts flowing by 2020, this project will unite the eastern Baltic Sea region with the rest of the EU energy market and end Finland’s dependence on a single gas supplier.

Money has also been allocated to the construction of the Midcat gas pipeline which, when built, will help to integrate the gas markets of Spain and Portugal with the rest of Europe.

Increasing energy efficiency

A good way to reduce Europe’s import bills and dependence on energy is to consume less of it. That means everything that uses energy — from cars and washing machines, to heating systems and office equipment — should be designed in such a way that it uses less energy.

In November 2016 the Commission proposed a ‘Clean Energy for all Europeans’ package of revisions to laws to help the transition to a clean energy system. The package includes actions to speed up clean energy innovation, to renovate Europe’s buildings to make them more energy efficient, and to improve the energy performance of products and provide better information for consumers.

Reducing emissions

The EU has committed to cutting carbon dioxide emissions by at least 40 % by 2030 while modernising the EU’s economy and creating jobs and growth for all European citizens.

Climate deliverables

The EU played a key role in brokering a global deal to tackle climate change in December 2015. At the Paris climate conference, 195 governments agreed to limit global warming to well below 2 °C this century. In October 2016 the EU formally approved the Paris climate change agreement and it entered into force in November. This means the EU (and the rest of the world) must take the actions needed to reduce emissions.

In July 2016 the Commission proposed binding annual greenhouse gas emissions targets for Member States from 2021-2030 for the transport, buildings, agriculture, waste, land-use and forestry sectors, together with a low-emission transport strategy.

Research and innovation

Under the EU’s research programme, almost €6 billion is dedicated to non-nuclear energy research for the period 2014-2020. In September 2015 the Commission adopted the Strategic Energy Technology Plan which will help address the challenges that must be met for the transformation of the EU’s energy system. It focuses on actions that will help the EU to become the global leader in renewable energy and develop energy efficient systems.

Having the technological lead in alternative energy and reducing energy consumption will create huge export and industrial opportunities. This will also help boost growth and jobs.

Renewables will play a major role in the transition to a clean energy system. Europe has set itself a target to collectively reach a share of at least 27 % renewables in final energy consumption by 2030. In 2030, half of the EU’s electricity generation will come from renewable sources. By 2050 our electricity should be completely carbon-free.

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