Twentieth Report of Session 2019–21 Contents

2EU Energy System Integration Strategy4

This EU document is politically important because:

  • EU policy in this area is of strategic importance to the UK; and
  • there are specific policy implications for Northern Ireland due to obligations under the Ireland/Northern Ireland Protocol, with potential policy implications for the UK as a whole.

Action

  • Write to the Minister.
  • Draw to the attention of the Business, Energy and Industrial Strategy Committee and the Northern Ireland Affairs Committee.

Overview

2.1As part of its Green Deal policy, the Commission has put forward this Strategy to accelerate energy system integration — the coordinated planning and operation of the whole energy system, across multiple energy carriers, infrastructures, and consumption — as the pathway towards the decarbonisation of the EU economy. The Strategy has potential direct effects by virtue of suggested changes to legislation to which Northern Ireland must continue to align and indirect effects at a strategic level as well as through the push to develop renewable energy further, such as offshore wind energy in the North Sea.

2.2Explaining its initiative, the Commission says that the energy system is built on several parallel, vertical energy value chains, which link specific energy resources with specific end-use sectors. Petroleum products, for instance, are predominant in the transport sector, while coal and natural gas are mainly used to produce electricity and heating. Electricity and gas networks are planned and managed independently from each other, and market rules are also largely specific to different sectors. The Commission argues that this incoherent approach cannot deliver a climate-neutral economy.

2.3The Commission’s Strategy is built on three pillars, the first of which is to make the system more ‘circular’ by improving efficiency and utilising waste. The Strategy proposes targeting waste heat from industrial sites, data centres, or other sources, as well as using agricultural residues to create biogas. It also promotes the ‘energy efficiency first’ principle to reduce demand and thus overall costs for energy production, infrastructure and use.

2.4The second pillar is to increase the share of renewable energy in end-use sectors through direct electrification, utilising the rapid growth in production of decarbonised electricity to power heat pumps in buildings, industrial processes, and electric vehicles.

2.5The third pillar — where electrification is not possible or too costly — is to increase the use of clean and decarbonised gases such as renewable hydrogen or sustainable biogases. The Commission will propose a new classification and certification system for renewable and low-carbon fuels.

2.6Specific actions outlined in this document include:

2.7The Strategy has been published alongside a Hydrogen Strategy, on which we are reporting separately.

2.8In his Explanatory Memorandum, the Minister of State for Business, Energy and Clean Growth (Rt Hon. Kwasi Kwarteng MP) says that the Government welcomes the publication of the Energy System Integration Strategy as part of the European Green Deal, but offers no further analysis.

Our assessment

2.9The Minister fails to provide any analytical comment at all on this Strategy, which is very disappointing and serves only to frustrate our ability to scrutinise the Government’s approach. While we recognise that the details of the EU’s future plans will be set out in greater detail at a later stage, we consider that there is a sufficient level of information to indicate the direction of travel. We will therefore ask for an expeditious and thorough analysis from the Government.

2.10While we are reluctant to provide our own analysis in advance of receiving the Government’s perspective, we note the following potentially relevant observations:

Action

2.11We have written to the Minister as set out below. Our letter has been copied to the Business, Energy and Industrial Strategy Committee and to the Northern Ireland Affairs Committee.

Letter from the Chair to the Minister of State for Business, Energy and Clean Growth (Rt Hon. Kwasi Kwarteng MP)

We have considered your Explanatory Memorandum on the above document.

The lack of analysis was very disappointing and has rendered our task of scrutinising your approach impossible. We therefore ask that, within ten working days, you provide a comprehensive analysis to include, as a minimum:


4 Commission Communication — Powering a climate-neutral economy: An EU Strategy for Energy System Integration; COM(20) 299; Legal base: —; Department: Business, Energy and Industrial Strategy; Devolved Administrations: Consulted; ESC number: 41390.




Published: 16 September 2020