EU energy governance Contents

Summary of Conclusions and Recommendations

1.The differing domestic political situations and energy mixes of Member States result in significant differences in the relative priority afforded to safeguarding energy security, sustainability and competitiveness. Consequently, Member States’ visions of an EU energy governance framework are enormously varied. Shifts in the foci of Member States’ policies may be caused by both internal factors, such as domestic fuel prices, and external factors, such as a geopolitical crisis that threatens energy security. (Paragraph 25)

2.Intelligently designed capacity markets have the potential to improve the security of supply and to reduce relative energy costs for consumers in the long term. In order to do this:

3.We welcome proposals that seek to achieve a greater co-ordination and harmonisation of EU capacity markets. Such proposals should aim to mitigate the distortion of competition between capacity providers and the distortion of cross-border trade to ensure adequacy of supply. (Paragraph 36)

4.We welcome the introduction of National Energy and Climate Plans, which will help to streamline and add clarity to reporting requirements. The Plans will help to present an overall picture of progress at a pan-EU level against the five dimensions of the Energy Union: energy security; the completion of the internal energy market; energy efficiency; emissions reduction; and research and innovation. (Paragraph 46)

5.We also welcome the proposal for Member States to provide integrated projections to the Commission covering both reference and policy scenarios, which will give an early indication of progress against EU level targets. (Paragraph 47)

6.The UK Government should be transparent, timely and comprehensive in reporting on its own progress against each of the dimensions of the Energy Union as well as against its own additional domestic targets, such as those required by the Climate Change Act 2008, Fuel Poverty Objectives and the creation of a more competitive retail energy market. (Paragraph 48)

7.We agree that there should be an overall assessment mechanism for the 28 National Energy and Climate Plans in order to ensure consistency, but we are not persuaded by the arguments for a new institution or monitoring body. Such assessment should be open and transparent and should be undertaken by the Commission itself, or by an existing body such as the European Environment Agency. (Paragraph 49)

8.It is clear that legislative proposals in the area of governance would be met with mixed reactions. While unnecessary legislative proposals are to be discouraged, the Commission should not be deterred from proposing measures seeking to guarantee commitments that have already been made, such as the 2030 renewables target. (Paragraph 55)

9.The EU-wide binding renewables target of at least 27% by 2030 has been agreed with the intention of increasing the diversity of supply and reducing the EU’s dependency on imported and domestic fossil fuels. But without an effective, transparent, accountable, and legitimate governance mechanism, the significance of the target is considerably diminished, the incentive to Member States to be ambitious is weakened, and any prospect of achieving the overall objective is jeopardised. (Paragraph 56)

10.Like all investors, those who invest in energy need clear medium and long term policy signals. The European Council should, with the Commission, present a much clearer timetable for the establishment of the energy governance framework. (Paragraph 61)

11.Rapid and unexpected changes in policies, even if they are designed to encourage investment, create policy uncertainty and may undermine investor confidence. (Paragraph 62)

12.The UK Government should be clear about its own renewable energy strategy and target for 2030 as part of its decarbonisation and energy security objectives. This will help create investor confidence and protect jobs at a time of uncertainty. (Paragraph 63)

13.The European Council should not only reiterate the binding targets agreed in October 2014, but should also call on the Commission to propose monitoring and enforcement mechanisms that act as a guarantor for the agreement and ensure that Member States share the effort equitably. Maintaining the integrity of the agreement is essential for securing investor confidence. (Paragraph 64)

14.Consumer interests should not be segregated in energy policy, and the interests of industrial, business and domestic consumers should be considered in energy governance framework discussions. The UK Government should consult stakeholders and consumers during the development of the UK’s National Energy and Climate Plan. (Paragraph 68)

15.The UK Government should go to greater lengths to explain to consumers the financial and security benefits of a more integrated EU energy market. (Paragraph 69)

16.The recent publication of the State of the Energy Union report, the Commission’s guidance on the preparation of Member State National Energy and Climate Plans, and the individual Member State fact sheets, are all positive developments. It is encouraging to see the Commission taking a broad look at EU-wide progress against agreed targets and measuring progress against each of the Energy Union dimensions. (Paragraph 79)

17.We call on the UK Government and other Member States to meet the Commission’s deadline for the preparation of the first National Energy and Climate Plans by 2018. (Paragraph 80)

18.Regional co-operation should be far more prominent in governance discussions. The benefits of communicating and co-operating are clear, and the Commission should require Member States to demonstrate that this has taken place in the preparation of their National Energy and Climate Plans. (Paragraph 81)

19.The Commission should ensure that 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. (Paragraph 82)

20.The Commission and Member States should work together on a governance framework that recognises the different timescales that are involved and ensures policy coherence between short and long term targets and objectives. (Paragraph 83)





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