Energy union: secure, sustainable, competitive and affordable energy for Europe
What is the energy union?
The energy union package aims to ensure affordable, secure and sustainable energy for Europe and its citizens. Specific measures cover five key areas, including energy security, energy efficiency and decarbonisation.
The energy union package was published by the Commission on 25 February 2015, and consists of three communications:
- a framework strategy for the energy union - detailing the goals of the energy union and the concrete steps that will be taken to achieve it
- a communication setting out the EU's vision for the new global climate agreement, set to be agreed in Paris in December 2015
- a communication setting out the measures needed to achieve the target of 10% electricity interconnection by 2020
EU energy in figures
- 6 member states rely on a single external supplier for all their gas imports
- the EU imports 90% of its crude oil and 66% of its natural gas
- 75% of EU housing is energy inefficient
- 94% of transport relies on oil products, of which 90% is imported
- Wholesale electricity prices are 30% higher and wholesale gas prices over 100% higher than in the US
Source: European Commission
Why do we need it?
The EU is currently the largest energy importer in the world, importing 53% of all the energy it consumes at an annual cost of around €400 billion. Many EU member states rely heavily on a limited number of suppliers, especially for their gas supplies. This leaves them vulnerable to disruption in energy supply.
In addition, Europe's aging energy infrastructure, poorly integrated energy markets - particularly across borders - and uncoordinated national energy policies often mean that EU consumers and businesses do not benefit from increased choice or from lower energy prices.
Improving energy interconnections between member states and modernising infrastructure would help minimise disruptions and energy dependency. In addition, the completion of the internal energy market would allow easier access to energy markets across national borders. This would also improve the affordability of energy and the competitiveness of energy prices for citizens and businesses.
In line with the EU targets agreed in the 2030 climate and energy framework, the EU also needs to reduce its overall dependency on fossil fuels and greenhouse gas emissions.
1. Framework strategy for a resilient energy union - COM(2015)80
The 2030 climate and energy framework
The 2030 framework includes targets for reducing greenhouse gas emissions and increasing use of renewable energies
The Commission's framework strategy on the energy union is based on the three long-established objectives of EU energy policy:
- security of supply
It builds on the 2030 climate and energy framework and the 2014 energy security strategy and integrates several policy areas into a single cohesive strategy.
The strategy has been structured around five closely linked areas:
- Energy security, solidarity and trust
This priority builds on the Commission's energy security strategy, adopted in May 2014. The aim is to make the EU less vulnerable to external energy shocks and reduce dependency on specific fuels, energy suppliers and routes. Proposed measures aim to ensure the diversification of supply (energy sources, suppliers and routes), encourage member states and the energy industry to work together to ensure security of supply, and increase transparency on gas supplies - in particular for agreements on buying energy from non-EU countries.
- The internal energy market
The aim is to give a new boost to the completion of the internal energy market. Priorities therefore include improving energy interconnections, ensuring the full implementation and enforcement of existing energy-related legislation, improved cooperation between member states when developing energy policies, and making it easier for citizens to choose their energy suppliers.
- Energy efficiency as a contribution to the moderation of energy demand
The EU should work towards the target set by the European Council in October 2014 of at least a 27% improvement in energy efficiency by 2030. Measures include increasing energy efficiency in the buildings sector - notably by improving heating and cooling systems, and improving emissions and fuel efficiency in the transport sector.
- Decarbonisation of the economy
The energy union strategy builds on the EU's ambitious climate policy, based on the commitment to reduce domestic greenhouse gas emissions by at least 40% compared to 1990. The EU emissions trading scheme (EU ETS) should also fully play its role in spurring investments in low-carbon technologies. The strategy sets out the aim for the EU to become the world leader in renewable energy and a global hub for developing the next generation of technically advanced and competitive renewable energies.
- Research, innovation and competitiveness
The aim is to put research and innovation at the heart of the energy union. The EU should be at the forefront of smart grid and smart home technology, clean transport, clean fossil fuel and the world's safest nuclear generation. The new approach to research and innovation in energy would build upon the Horizon 2020 programme and should speed up energy system transformation.
The framework strategy also details 15 action points for bringing about the creation of the energy union.
The Commission also plans to propose a dynamic integrated governance and monitoring process to make sure that actions at all levels contributed to the energy union's objectives.
2. The Paris Protocol - tackling global climate change beyond 2020 - COM(2015)81
The communication sets out the EU's vision for the new global climate change agreement (the Paris Protocol), set to be adopted in Paris in December 2015. In particular, it formalises the target of 40% less greenhouse gas emissions by 2030, agreed at the European Council in October 2014, as the EU's proposed emissions target for the Paris Protocol. The targets, also known as 'intended nationally determined contributions' or INDCs, have to be submitted to the UNFCCC by the end of March 2015.
The communication also:
- outlines the objectives where the Paris Protocol should deliver, including on emissions reduction, sustainable development and investment in low-emission climate resilient development
- highlights the need for a process to review and strengthen commitments made under the Paris Protocol
- underlines the importance for robust rules on monitoring, reporting, verification and accounting for all parties to the Paris Protocol
- details ways to promote implementation and cooperation, such as mobilising public and private finance, and supporting the development and deployment of climate technologies
- highlights the need to mobilise climate change through other policies, such as research and development policy
The communication also details the next steps that the EU needs to take ahead of the meeting in Paris in December 2015.
3. Achieving the 10% electricity interconnection target - COM(2015)82
This communication looks at the ways to achieve the 10% electricity interconnection target by 2020, an aim endorsed by the European Council in October 2014. In particular it focuses on:
- improving the situation in the 12 member states with an interconnection level below 10% (Ireland, Italy, Romania, Portugal, Estonia, Latvia, Lithuania, the UK, Spain, Poland, Cyrus and Malta)
- projects planned under the TEN-E regulation and the Connecting Europe Facility (CEF), which will contribute towards achieving the interconnection target
- available financial instruments and ways in which they can be fully exploited to support electricity interconnection projects
- ways to strengthen regional cooperation
In the Council
Energy ministers held a first exchange of views on the energy union in a meeting of the Transport, Telecommunications and Energy Council (TTE) on 5 March 2015. Ministers welcomed the Commission proposals, and stressed in particular the importance of the internal energy market and the need to reduce energy dependency. The Council also discussed the need to respect member states' national competencies over their energy mix.
Discussions continued in a meeting of the Environment Council on 6 March 2015. Environment ministers indicated that the 2030 climate and energy framework should be the basis of the decarbonisation aspects of the energy union. They also discussed the governance structures and underlined that they should avoid administrative burden and respect member states freedom to determine their energy mix.
The outcome of these two Council debates was used as input to European Council discussions on the energy union on 19-20 March 2015.
At a TTE Council meeting on 8 June 2015, energy ministers discussed the implementation of the energy union and adopted conclusions. The conclusions focus on how to provide consumers - both households and business - with secure, sustainable and affordable energy and to encourage investment.
At the same meeting, energy ministers also held a debate on the state of play and future developments in the implementation of the energy security strategy. Their discussions focused on ensuring security of supply. Ministers agreed on the importance of diverse supply routes and sources, regional cooperation, energy market design and infrastructure development.
At a TTE Council meeting on 26 November 2015, the ministers adopted conclusions on the Energy Union governance. This should provide guidance for the Commission to develop the governance instrument.
The governance system will monitor the EU's collective progress towards the achievement of EU energy and climate targets and its general policy objectives across the five dimensions. It will also provide a consistent and transparent overview of the state of the Energy Union.
Setting the EU's political agenda
In June 2014, the European Council adopted a 'strategic agenda' of five priority areas for EU action
In the European Council
The energy union was one of the five priorities in the European Council's strategic agenda, adopted on 26-27 June 2014. EU leaders underlined the importance of the energy union to avoid the EU relying on energy imports. The European Council also reiterated the goal of building an energy union during its meeting on 23-24 October 2014.
At its meeting on 18 December 2014, the European Council asked the Commission to present a comprehensive energy union proposal ahead of the March 2015 European Council meeting.
The proposals were discussed in depth by EU leaders at the European Council meeting on 19-20 March 2015. Discussions focused on specific aspects of the energy union package, in particular energy security and the internal energy market. Among other things, EU leaders agreed to:
- speed up the completion of electricity and gas infrastructure projects
- strengthen the security of supply for electricity and gas, through increased energy efficiency, use of internal resources and low carbon technologies
- ensure that gas contracts with external suppliers are more transparent and fully compatible with EU energy security rules
- develop innovative strategies for a new generation of renewable energies and increase energy efficiency
- step-up climate diplomacy ahead of the Paris climate summit in December 2015
The European Council on 17 and 18 December 2015 stressed the importance of the diversification of suppliers, sources and routes, which is one of the objectives of the Energy Union.