A Tsunami in Winter: Europe Shakes up Its Energy Policy
The European Commission’s winter package aims to reform the EU's energy system. Despite positive developments, EU Member States are still far from finding common ground
Temperatures are falling in Europe, and warm thoughts are doing little to help – let alone the European Commission's proposed legislation. After a long gestation period, the "winter package", also known as the "jumbo package" and the "tsunami of legislation" has now been unleashed in the framework of the Energy Union. The package of proposed legislation with the promising title Clean Energy for All Europeans stretches to more than one thousand pages. But does the package deliver on its promises?
Some aspects are already well-known and will be updated and adjusted in line with legislation to 2030, including revision of the directives on renewable energy and energy efficiency. At the same time, the Commission is taking a major step by proposing EU-wide restructuring and governance to complete the internal energy market. And finally the revisions also have to be adapted to existing agreements, particularly the target of limiting global warming to below 2°C that was set at the Paris Climate Conference and that came into force on 4 November 2016.
In reality, the lion that was preparing to pounce will turn into a lamb if, with the aid of capacity mechanisms, the door is opened wide to the construction of new coal-fired power stations (despite restrictions on CO2 emissions). The lion will also become toothless if the target for energy efficiency savings is only raised to 30% (from 27%) – despite repeated assertions of the principle of "Efficiency First!". And the EU will become totally powerless if it pares back the "priority dispatch" system, which gives renewables priority in Europe's energy grids. The unambitious target of "at least 27% renewables" in total energy consumption by 2030 will be weakened still further if these targets are only EU-wide, i.e. are no longer binding targets for individual Member States, as was the case with the 2020 targets. How is the EU to achieve President Juncker's goal of becoming the world number one in renewable energies? For a long time now, the US and China have been one step ahead in terms of investment. The EU now has to work much harder to turn its fine words into actions.
But there is light at the end of the tunnel – for the first time, explicit mention has been made of energy cooperatives and their access to the grids. The EU has finally recognised the potential of citizens who produce and trade their own energy. The overall vision of the Energy Union has also clearly set its sights on a low-carbon, sustainable and secure energy system for Europe. Even the harshest of EU sceptics must understand that this cannot happen overnight. So it is all the more important to prevent these proposals being watered down in subsequent negotiations with the European Parliament and finally the Member States. It is the latter who have to set the final course towards a successful energy transition in Europe by supporting local and regional initiatives that also actively involve their European neighbours. In this respect, "Clean Energy For All Europeans" is only one part of the package. Now it remains to be seen which EU Member States will take positive steps towards achieving clean energy.
The proposals from Brussels highlight the fact that European policies on renewables currently have no ambitious common denominator that can be agreed by all Member States. Instead, Member States are all pursuing their own, purely domestic, energy interests – from coal in Poland to nuclear in France. So how can the EU set out an energy policy that is sensible, coherent – and ambitious?
In the past, pioneers of the energy transition such as Germany have failed to convince their European neighbours of the positive aspects of restructuring the energy system through innovation and economic growth. So far it has not been possible to build a coalition for a European energy transition, and now people are surprised at the very mixed result that has come out of Brussels. We could go so far as to say that the way Germany has gone it alone in energy policy and the concomitant – not always positive – effects on the electricity markets of our immediate neighbours is one of the main reasons for the EU's unambitious proposals on energy.
If in the next two years Germany wants to have a meaningful impact on the process of relevant EU directives, then Berlin should not be focusing on fragmented quarrels about issues of priority for renewables or capacity mechanisms. Instead it should take a step back and work closely with other EU Member States – including discussion of their concerns – to produce a new narrative for a common European energy transition with a focus on the advantages of modernising the economy for international competitiveness. Only then can the energy transition be successful in both Germany and Europe.