Energy is crucially important to all of us. We depend on an abundant and affordable supply of energy. The European Commission’s flagship Energy Union Strategy recognises this fact and has five aims: energy security; the completion of the internal energy market; energy efficiency; emissions reduction; and research and innovation. An agreed EU energy governance framework will underpin the relationships between the EU institutions and Member States. Such a framework will seek to meet the energy policy objectives of the EU on the one hand, and fulfil national aims on the other.
Capacity markets can help to secure energy supply in the medium term at a competitive price. We call for the development of common EU standards for capacity markets, a greater emphasis on the role of regional co-operation, energy storage and demand side measures, and the opening up of domestic capacity markets to cross-border mechanisms. We argue that any EU co-ordination of capacity markets should aim to mitigate the distortion of competition and cross-border trade.
We welcome the introduction of National Energy and Climate Plans, the move to longer-term planning and the assessment of progress against EU level targets. We recommend that the overall assessment of the consistency of Member State National Energy and Climate Plans should be carried out by the Commission or another existing body. On a national level, the UK Government should do more to report against its own progress on its energy and climate goals.
We heard that legislative proposals in the area of governance would be controversial. We heard that the EU-wide binding 2030 renewables target had not been broken down into individual Member State targets. We believe firmly that without an effective, transparent, accountable, and legitimate governance mechanism, the significance of the target will be considerably diminished and the incentive on the part of Member States to be ambitious will be weakened. We urge the European Council to call on the Commission to propose a monitoring and enforcement mechanism that acts as a guarantor for the agreement, and ensures that Member States share the effort equitably.
Long term policy signals are crucially important for those who invest in energy. The European Council and the Commission should be much clearer on the timetable for the establishment of the energy governance framework. To stimulate investor confidence, the UK Government should be clearer about its own long term renewable energy strategy and national energy and climate targets.
Consumers should play a key role in energy governance discussions. We recommend that the UK Government consult stakeholders and consumers during the development of the UK’s National Energy and Climate Plan and that it should explain the financial and security benefits of a more integrated energy market more fully.
Regional co-operation should be far more prominent in governance discussions, and we call on the Commission to require Member States to demonstrate that this has taken place in the preparation of their National Energy and Climate Plans.
More broadly, the Commission should ensure that its proposals for a future energy governance framework include legal clarity, a respect for Member State sovereignty, a focus on security of supply, commitment to the consumer, real ambition for decarbonisation and increased regional co-operation.