Source: Directorate-General for Energy

"Progress on the Energy Union"Institute of International and European Affairs

18 November 2016

Mechthild WörsdörferDirector for Energy Policy

Directorate-General for Energy European Commission

2

Source: Directorate-General for Energy

The Energy Union

2020

2030

-20 % Greenhouse

Gas Emissions

20% Renewable Energy

20 % Energy

Efficiency

- 40 % Greenhouse Gas

Emissions

27

% Renewable

Energy

27%*

Energy Efficiency

10 % Interconnecti

on

15 % Interconnecti

on

* To be reviewed by 2020, having in mind an EU level of 30%

European Energy Security Strategy

2030 Energy and Climate Framework

Source: Directorate-General for Energy

16 February 2016

Security of Gas Supply

Package

1) Revision of Regulation on Security of Gas Supply

2) Revision of the Intergovernmental

Agreement (IGA) Decision

3) Strategy for Liquefied Natural Gas and Storage

4) Strategy for Heating andCooling

Reducing import dependency by

modernising the heating and

cooling sector

Improving security of supply by creating

competitive gas markets

more effective crisis prevention

and response instruments

based on cooperation and

solidarity

Based on Energy Union priorities

Source: Directorate-General for Energy

April / July 2016Focus on the climate aspects of

Energy Union

Commission proposal for Effort Sharing Regulation (ESR) for the period 2021-

2030 to deliver the -30% emission reduction by 2030

Proposal for Land use, land-use change and forestry (LULUCF) Regulation

integrating emissions and removals into the EU legal framework

Low-emission mobility strategy focusing on i) efficiency for transport; ii) low-

emission alternative energies; iii) zero-emission vehicles

Source: Directorate-General for Energy

energy efficiency first

global leadership

in renewables

fair deal for energy

consumers

Policy package (late 2016): Smart and Clean Energy for all Europeans

enabling framework

Source: Directorate-General for Energy

Energy Efficiency Initiatives

Optimal level of energy savings target for 2030

Framework for 2030 to ensure the cost-effective delivery of the target

Energy efficiency obligation schemes/ metering and billing

Energy Efficiency Directive

Simplification of outdated provisions

Uptake of smart building technologies

Link between policy and financing

Energy Performance of Buildings

Directive

Source: Directorate-General for Energy

Market Design Initiative

More flexible and interconnected electricity market

European framework for Capacity Remuneration Mechanisms

Role of consumers and retail markets

Cooperation at times of crises

Institutional framework

Source: Directorate-General for Energy

Creating an enabling framework for the

deployment of renewables in the Electricity Sector

Mainstreaming renewables in the

Heating and Cooling Sector

Decarbonizing the Transport Sector

Empowering and informing consumers

Making sure the EU binding target is timely achieved

The revised Renewable Energy Directive

Contributing to the EU political priority of becoming world number 1 in renewables

Source: Directorate-General for Energy

National Integrated Energy and Climate Plans (2021 to 2030)

National progress reports

European Commission monitoring

Governance of the Energy Union

Source: Directorate-General for Energy

Global energy prices arevolatile.

We stay competitive byreducing our energy coststhrough energy efficiencymeasures …and developing new efficientand clean technologyindustries.

Smart household energyconsumption, andproduction, make EUcitizens the drivers ofefficient and clean energy.

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4

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10

12

14

16

18

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1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7

2008 2009 2010 2011 2012 2013 2014 2015 2016

$/mmbtu

Japanese gas price

UK

US

Report on energy prices and costs

Source: Directorate-General for Energy

Early 2017 2nd State of the Energy Union

State of play of the Energy Union (across the 5 dimensions)

Country fiches & policy observations for all MS

EC guidance on regional cooperation

Source: Directorate-General for Energy

Benefits of the Energy Union for Ireland

Diversification of gas supply willfurther strengthen Ireland'senergy security situation.

Market integration andregional cooperation is neededfor the development of Ireland'srenewable sector.

Electricity interconnections andenhanced cross-border trade willhelp control electricity prices.

Renewable energy expansion willbe beneficial to Ireland, as itsrenewables supply potentialexceeds by far domestic demand.

8.6 %

Source: Directorate-General for Energy

#EnergyUnion@Energy4Europe

Mechthild Wörsdörfer@MWorsdorfer

Our core values – excellence, transparency, integrity 13

Source: Directorate-General for Energy

Background slides

Source: Directorate-General for Energy

• Market Design Communication: in view of a revision of electricity legislation in 2016

• New Deal for Energy Consumers

• Legal proposal for the review of the Energy Labelling Directive

• Legal proposal for the review of the Emissions Trading Directive

Summer Package (July 2015)

• SET Plan proposes 10 focused research and innovation actions to accelerate the energy system's transformation

Integrated Strategic Energy Technology (SET) Plan (September 2015)

• 2nd PCI list, Reports on energy efficiency, climate action, energy security strategy, oil stocks, nuclear safety

State of the Energy Union (November 2015)

The Energy Union - Implementation 2015

Energy

•

Coordinate State Interventions=> Generation Adequacy

Market Design Reform:Elements

Energy

5 Regions instead 42 TSOs

1 Central ROC

2 Nordic ROC

3 BI ROC

4 Iberian ROC

5 SEE ROC

= Regional Operations Centre (ROC)

= Border between Regional Operations Centres

Foster Regional TSO-Cooperation

Market Design Reform:Elements

Energy

A strong renewables deployment in electricity

Achieving the at least 27 % EU level binding renewables will lead to around 50 % renewables deployment in the electricity sector by

2030

Renewables: Elements

Energy

The cost of capital for RES investments remains high and substantially diverging across the EU while RES investments mostly

go to a limited number of MS

However, meeting the 2030 targets cost effectively would require an important level of investment more evenly spread across the EU

Achieving the at least 27 % EU level binding renewables will lead to around 50 % renewables deployment in the electricity sector by

2030

Renewables: Elements

Energy

The revision of the Renewables Directive in a nutshell

Gap Avoiding Measures(aiming at facilitating cost effective RES development)

Empowering & Informing Consumers

Removing administrative barriers

Gap Filling Measures (in case of ambition or delivery gap)

ElectricityHeating &

CoolingTransport

Renewables: Elements

Energy

Problem setting and drivers

Simplification and new

governance post-2020

to upgrade accounting

framework

Policy framework to

identify most sustainable

biomass sources and

enhance forest sink

LULUCF presents

untapped potential for

emission reduction and

increased removals.

This prepares the EU for the long term.Post 2050, the Paris Agreement outlines that emissions might need to be counter balanced by higher removals.

LULUCF

Energy

Main features of LULUCF proposal

1. Provides for continuity• Stand-alone LULUCF pillar

• No-debit rule

• Defines monitoring, reporting and accounting obligations of Member States (- not individual farmers or foresters)

• Flexibility within LULUCF and from ESR to LULUCF

2. Proposes a number of innovations• Simplifying administration

• Aligning accounting rules (Afforested and Agricultural land)

• Defining EU-internal process to set national forest management levels

• Creating flexibility to the ESR - up to 280 mt CO2

LULUCF

Energy

23

ETS/ LULUCF