Commissioner, Vice-President, Mr. Chairperson,
I am honoured to be here today, to support the launch of the Africa Single Electricity Market.
Today marks a turning point for Africa.
The African Union and its Members have shown strong political will to develop a truly “integrated, prosperous and peaceful Africa” enshrined in the Union’s Agenda 2063.
The Africa Single Electricity Market will be an essential element of the African Continental Free Trade Agreement. It will offer African industries, businesses and households secure, competitive, and affordable electricity.
And all this in a continental market serving 55 countries and 1.3 billion people!
This is a valuable opportunity, considering Africa’s incredible renewable energy potential – which stands to benefit its people and its economy.
At the same time, it can help improve energy security, and reduce electricity prices for the consumer.
In the European Union, we began our journey towards a single electricity market 25 years ago.
A generation later, it is estimated that EU market coupling stands to benefit European consumers for around EUR 1 billion euro per year.
So, how did we get here?
First, we introduced progressive liberalisation of national energy systems. This separated grid operation from generation and distribution.
By 2007, industrial and domestic consumers were free to choose their own gas and electricity suppliers, creating the first wholesale energy markets.
In 2009, we introduced the cornerstones of the internal energy market.
First, mandatory national regulation, providing power producers with equal access to the grid.
Second, strong regional cooperation between national regulatory authorities through the dedicated Agency (ACER).
Third, strong coordination of grid operation, common investment plans and harmonisation of standards through the European Network of TSOs (ETNSO-E).
And fourth, we also introduced rules to increase transparency of electricity prices – for integrity of European energy markets.
We have also worked on linking the energy infrastructure of our Member States through the Trans-European Networks for Energy.
This policy identifies strategic areas, such as smart grids deployment or electricity highways, to focus our actions.
It identifies projects with an important regional integration perspective. With these so-called “Projects of Common Interest”, we allocate funding to help implement the projects.
A strong regulatory framework and optimised infrastructure development go hand-in-hand, to ensure the system works efficiently. And, that it remains competitive so that it can deliver the lowest possible wholesale electricity price.
With the Paris Agreement and, more recently, the launch of the European Green Deal at the start of the current Commission mandate in 2019, our goal is for the EU to become climate neutral by 2050.
This implies a significant increase in renewables in the energy system. By 2030, the share of EU renewable electricity production is set to at least double from today’s 32% to around 65% or more.
Electricity will become the most important energy carrier when we decarbonise our energy system. It will be very much based on the most natural energy generators – the wind and the sun.
That is why we put in place a Clean Energy Package in 2019. It is the most advanced regulatory framework to date to adapt the European energy system to meet these challenges.
Our electricity market is redesigned so that renewables can form the backbone of our electricity supply.
We have more flexibility to adapt to a larger share of variable renewables, for example through shorter trading times. But, at the same time more stability, integrating renewables into the general market framework with minimal to no derogations.
We have more cross-border flows to make sure that we use the most efficient and least polluting power plants at any given time, and share renewable energies over a larger area. This increases competition by limiting capacity mechanisms and subsidies to fossil fuel plants.
And last but not least, we have stronger cooperation of system operators: to make sure the lights stay on in an ever more complex system;
The Clean Energy package puts the consumer first.
With the drop in technology costs, consumers are becoming more and more active in producing, consuming, storing and selling their own electricity.
Consumers are awarded with new opportunities to engage with the market directly or through energy communities. And, they are consuming energy more efficiently and cost-effectively, without compromising on comfort.
By giving them space, these productive consumers - these prosumers - help us reach our energy and climate targets.
A strong focus on the consumers is to me also the main similarity of the European and African efforts. ‘Energy communities’ is already a model developed in many African countries that facilitate the development of mini-grids. We are seeing their many co-benefits, such as territorial cohesion and local job creation, and mobilising private capital.
Combined with a smart decentralised approach, energy communities will be the key to Africa’s energy access challenge in rural areas.
The design of the African Single Electricity Market will benefit from integrating on- and off-grid models, making use of technological and digital innovation such as smart metering.
In this regard, dedicated and adequate supportive measures for energy poor and vulnerable customers are key.
Our Clean Energy Package includes safeguard measures that ensure universal service, including for customers in remote areas. And, it allows price regulation for micro-enterprises, as well as those in energy poverty.
Our European Single Energy Market is still in the making. It will continue to evolve to fit our needs.
Turning AfSEM into the success it deserves to be, requires the political will and commitment that has enabled the endorsement of the AfSEM Policy Paper, Roadmap and the Governing Structure by the AU Heads of States and Government.
This means working together to prioritise regional infrastructure and back the much-needed reforms to transform national electricity systems, to become fit for markets, and giving space to cheap renewable energy sources.
As AfSEM policy paper puts it, “Creating the AfSEM does not diminish the energy sovereignty of AU Member States; it enriches it.”
I want to confirm the European Union’s intention to remain a strong partner for Africa.
The EU has long been supporting Africa’s journey towards continental harmonisation and integration of the electricity sector. The support has been possible, not least with our Technical Assistance for Sustainable Energy.
Currently we are working alongside AUDA-NEPAD in the development of a Continental Power System Masterplan to support the infrastructure development of AfSEM.
We are also supporting the Programme for Infrastructure Development in Africa (PIDA). Here, I congratulate the African Union for its recent adoption of the 2nd Priority Action Plan for 2020-2030.
In the past seven years, we have spent a total of EUR 3 billion in grants in the energy sector in Africa. This has helped provide 18 million people with access to energy and has financed major infrastructure projects, including transmission lines and interconnections.
We are now laying the groundwork for the next 7 years, with the aim of supporting greener and resilient development of the energy sector.
We have a good opportunity to renew the strong partnership with the African Union at the next EU-AU summit, which can take place in Brussels next year – COVID allowing, of course!
Rest assured, you can count on our cooperation in the development of the African Single Electricity Market.
So let’s help enrich the energy sovereignty of AU Member States with an impressive AfSEM! Thank you!