Ladies and gentlemen, greetings. And welcome to our Forum.
I’m feeling quite at home with our topic today. Estonia has more than 20 inhabited islands. Some of the smallest ones have just a single inhabitant and the biggest has more than 30,000. But no matter the size, the energy transition is important for them all.
Islands are unique places to live. But that also means that they have distinctive obstacles to overcome. Especially when it comes to energy.
They have small and isolated energy systems. But they can also be perfect real-life laboratories for the deployment of new innovative solutions.
So, I’m looking forward to seeing how your discussions evolve today and tomorrow.
But, I want to begin with our current energy policy context.
Europe has set and agreed its medium- and long-term climate commitments:
- To decrease the greenhouse gas emissions by at least 55% by 2030
- and to reach climate neutrality by 2050.
That’s the destination. And now is the time to decide how we shape the policy road to get there.
Over the past months, the Commission has been working on a major legislative package called “Fit for 55”. We expect to publish it in July.
These proposals will translate our new climate ambitions into relevant legislation. In the energy field, it will cover renewables, energy efficiency and energy taxation. But other initiatives, like the carbon pricing scheme or the alternative fuel strategies for transport also have a connection to energy sector.
Some elements of the package are particularly relevant for islands.
First, we will need much more renewable energy.
Today, 75% of heating and cooling in Europe is still based on fossil fuels. It’s also responsible for 60% of emissions in the energy sector.
At the same time, transport is another sector with huge untapped potential for electrification. The Commission analysis has shown that to deliver on the 55% target, the share of renewables in transport should reach 24% by 2030. That is much higher than the current commitment of 14%.
That takes on even more significance if you consider that for islands, transport – including transport to and from the islands - is often responsible for the majority of energy consumption and emissions. In some cases that figure reaches up to 90%.
Overall, by our estimates, we will need to at least double the share of renewables in electricity. And we need to substantially increase that share in transport, heating and cooling sectors.
Here, islands are perfectly situated to lead the change on boosting renewables given their huge potential for offshore energy production.
Second, what do we do with that renewable energy once it is generated?
Here the issue is improving the integration of our energy system. This will help us to support a higher degree of electrification, and new renewable and low carbon fuels, such as hydrogen, for the hard to decarbonise sectors.
In the context of islands, that translates to a faster deployment of electric cars and buses or innovative solutions for ferries, such as use of hydrogen or electricity.
Smart charging systems or hydrogen production can also be an important stabiliser of the local electric grids and provide short and longer-term storage capacity.
These are the areas where change is demanded. But these are not simply challenges to overcome. They are opportunities to be seized. So we need to ask ourselves how can we help you in doing this?
The Clean Energy for EU Islands Initiative has a clear role to play here.
During the pilot phase of the EU Islands initiative, we mostly focused on organisational support for islands: Things like community building, support for clean energy transition agendas and project development on pilot islands.
Now we are in the second phase of the Initiative. And we today aim to have a much stronger focus on the identification of concrete projects and matching them with potential investors and funding instruments.
We need a number of good and easily replicable projects on the islands to demonstrate that:
- there are alternatives to centralised fossil-fuel based energy systems and;
- that these alternatives are both technologically feasible, and economically sustainable.
Another way to maximise our impact is by focusing on the most carbon-intensive fuels and sectors. And that means coal, oil and transport.
First, phase out of coal. The transition away from coal is accelerating in Europe. Yet, that’s not so easy for islands that are still dominantly using coal.
I think that the ambition of Mallorca, which has already committed to close its coal-fired plant by 2025, has set a high standard.
Hopefully, other coal dependent islands will follow, so that we could declare EU islands coal-free well before 2030.
Second, I mentioned oil. It is the main source of electricity on islands and this is a trend that needs to change. As things stand now, it leads to air pollutants and CO2 emissions from the islands. And at levels that significantly exceed those of mainland EU.
As I said, islands have an access to a wide range of renewable energy sources. Even so, most of them still have a much lower share of renewables compared to the mainland and to the EU average. This needs to change.
We have renewable energy sources that have grown into competitive, mature technologies. Think of wind and solar. They can easily replace oil as the main source of electricity on the islands.
To get there, we need to make the deployment of renewables on islands easier and we need to stop subsidies to oil-fired power generation.
Third, we need to decarbonise the transport sector on islands.
The barriers still exist. When it comes to ferries, there is a lack of technological options, high capital costs and long amortization periods.
But we are seeing innovations come to the forefront. In Finland, the Elektra, Finland’s first hybrid-electric ferry is operating on short stretches in the archipelago.
In the Azores, a consortium of industrial partners is experimenting with vehicle to grid charging on the São Miguel island.
But we need more innovative and economically feasible solutions. And we need all local stakeholders on board - ferry companies, utilities, local and regional transport authorities.
Let me finish with this: the biggest shift we need to see will be a shift in mind-set. The clean energy transition and our climate ambitions are not about stripping away our way of life. They are about evolving towards a new one.
I don’t see it as a challenge to overcome, but an opportunity to be seized.
And I hope that all of you can see and embrace those opportunities for your islands.
We know that islands and other coastal regions, often heavily dependent on tourism, are in some of the most vulnerable situations right now. Both, in terms of the climate change and the pandemic.
Investments in clean energy can be a pathway to recovery, can diversify island economies and can create new jobs.
So, with this, I will end my remarks. I hope you will spend two very interesting and useful days discussing and sharing many new ideas.
Thank you and have a very good day.