(Source: European Commission)
“Check against delivery”
I’m very pleased to continue today our discussions on the EU response to the current energy challenges.
We are going through a crisis that is more acute and broader than anything we have experienced before, whether in the 1970’s or in 2009. It is at the same time a climate emergency and an energy security crisis.
The ripple effects of the Russian aggression to Ukraine will cause every aspects of our energy systems to change.
And there is simply no going back to the time before the invasion. We have entered into a new environment.
Put it simply, REPowerEU is the necessary policy response to this shift.
Our way to turn the page on the time before 24 February and draw the necessary conclusions.
We cannot continue feed the Russian war machine with our fossil fuel imports. We cannot give a disproportionate economic and political influence to an energy supplier that is not reliable.
From the COVID pandemic we learned a lesson: the best way to come out of a crisis is not to preserve what we can of our past. It is to look forward and build a different future.
This is REPowerEU: a plan to build a future based on a clean energy system without Russian influence.
A plan that builds on our decarbonisation agenda. REPowerEU is not designed to change the course of the Green Deal. They each reinforce one another. Because it would not make sense to try and replace oil, coal and gas from Russia simply with oil, coal and gas sourced from somewhere else. It would jeopardise our decarbonisation goals and it would not make economic sense.
That’s why first and foremost, the central element of our Plan is to enable more renewable energy across our system.
This means more renewable electricity to replace gas in power generation, heating and cooling, more renewable gases to help industry to shift away from gas.
We are proposing to increase our renewables target from 40 to 45% by 2030. To back this up, we proposed a Strategy for the solar sector, a plan to accelerate the production of green hydrogen and an action plan to double the production of biomethane by 2030.
All of this means that we need to deploy renewable capacity at a pace that is many times faster than today.
If we want to succeed, we need new tools and new approaches. That’s why a key part of this Plan is the legislative proposal to introduce faster and more targeted permitting procedures. Right now we are looking at almost a decade for some offshore wind projects to get off the ground. This is far too long.
Thus, we have proposed that the renewable energy projects are considered to be in the overriding public interest. Second, we propose that repowering projects and solar panel installations have shorter and simpler procedures.
Third, we propose that Member States can designate ‘go-to’ areas, places most suited for developing renewable installations and where the environmental risks are known to be lower. These areas will be defined based on a strategic environmental assessment. Once this is done upstream, individual projects will not normally need a separate assessment and permitting procedures will be done much faster. In these areas permitting shouldn’t take more than a year or six months for repowering projects.
This is in no way a compromise on our environmental protection. It’s simply another, faster route to reach the same standards.
I hope I can count on your support for the Commission’s proposal on permitting in the Parliament’s report. Only if we can go faster with projects deployment, then it makes sense to go higher with our renewables target.
This Committee has requested the Commission to produce an updated modelling for the increased renewables and energy efficiency targets. We understand that having this important data is crucial for your work, including interinstitutional negotiations. I want to tell you today that we have finalised this work and we are completing the required internal validation procedure in the Commission. We will transmit the analysis by the end of this week.
Of course, renewables are not the full story. Energy efficiency and savings are the quickest solution to increase our energy security, help bring down prices and reduce emissions.
And every euro invested in energy efficiency will boost our economies.
We adopted an EU Save Energy Communication to help Member States design the best response for them. Just by changing our behaviour with voluntary choices – we could already cut demand for oil and gas by 5% by the end of this year. Small gestures can have a big impact.
Last week I spoke about the role energy savings can play in Sønderborg at the IEA’s global conference on energy efficiency. I am doing my part to pass the message, not just on an EU level, but globally, that efficiency has to be part of our solution. And I hope to count on the Parliament’s support for an ambitious Energy Efficiency Directive.
But we must not lose sight of the short-term energy security need. Right now, we are not in a position to match the shortfall from Russian gas just with new renewables. We need to diversify and replace Russian gas from other reliable sources and through smart investment.
What I’m saying is that we are working as fast as we can to establish the right partnerships around the world. We aim to replace 50 bcm of Russian gas with LNG supplies and 10 bcm with additional pipeline supplies.
The share of Russian gas imports in the EU has already gone down from 45% in April last year to 31% in April this year. If we look at pipeline gas alone, the reduction is even bigger, from 40% last year to 26%. LNG imports have reached record numbers: 12.6 bcm were imported last April in the EU. This represents a 36% year on year increase for LNG.
As you know, the EU Energy Platform is part of this effort. It has started working at speed and we have already established the first regional platform for South Eastern Europe, to help Bulgaria and the neighbouring countries. Other regional platforms will be established in the coming weeks.
The Platform will aggregate EU gas demand, help use efficiently and transparently gas infrastructure, like LNG terminals, and carry out outreach to supply partners. Initially, we aim at concluding memoranda of understanding with third countries to open the door for EU companies to come in and conclude commercial contracts. But we are also working to set up a joint venture mechanism that will help us purchase gas directly and redirect it in a competitive way among interested Member States. It’s a way to use the collective political and economic weight of our 27 Member States to ensure affordable and secure energy imports.
In terms of outreach to international partners, we are quite advanced with the United States, as well as Norway. This evening I will travel to Cairo to continue the discussions with Egypt and Israel. I will also visit Azerbaijan in July. We have intense contacts with Canada, Qatar, Algeria, and others.
That said, next winter is around the corner, and it will be a challenging moment.
We need to fully prepare for any scenarios.
The first insurance policy is to have an adequate level of storage. I very much welcome the interinstitutional agreement on the storage proposal.
The filling of storage is progressing well, despite the high prices. The EU-wide storage level is at 50.2% of capacity. Last year at the same time, it was at 44.7%.
Yet no one knows what can happen in the coming months. That’s why I insist with Member States that they step up preparedness, update the contingency plans in place and conclude any outstanding bilateral solidarity agreements. Today, only six agreements have been concluded.
I am also giving priority to deliver a coordinated contingency plan for next winter and to provide guidance to Member States on how to organize demand reduction decisions, if needed.
Let me conclude with an issue high on your minds: the energy prices. Realistically, we will remain in a high price environment for this year. The Commission has pointed to several options Member States can use to effectively mitigate the impact of prices– from taxing windfall profits to extending the use of regulated prices. We have cleared the mechanism introduced from Spain and Portugal to subsidise the input cost of marginal electricity generators. We will be examining other national schemes. We will always do so while protecting our Single Market and the decarbonisation process. And following the European Council conclusions, we will launch a process of impact assessment and large consultation on the optimization of the functioning of the European electricity market, including the effect of gas prices on it.
Honourable Members, Ladies and gentlemen,
REPowerEU is a comprehensive plan for energy security. It is a bold step. But let’s imagine what would be the alternative. Let’s imagine a return to energy nationalism, where each Member State would scramble to secure its own gas supplies, to prepare its own contingency plan, would invest in its own energy security infrastructure, like new LNG terminals, without a regional or European perspective. When this war in Ukraine eventually ends, we would all be in a weakened position.
The best way to come out of this crisis is together, side by side. REPowerEU is the path towards a true Energy Union.
I truly hope for your support on that.