Ladies and gentlemen,

Honourable Members of the European Parliament,

Good morning and welcome to the call. I’m very happy to be speaking with you today.

Six months ago this debate would have looked very different – sitting around a room instead of around our screens. I have met some of you already and we have had opportunities to discuss the future priorities of energy policy.

The scope of the challenges we are facing today may have changed, but our energy solutions remain the same. Because, our solution to leap-frog out of the imminent economic crisis and avoid the impending climate crisis is one in the same.

CRISIS AND RECOVERY

Over the past couple of months we have had to use the word ‘unprecedented’ many times.

The COVID-19 crisis is threatening our health, our prosperity and our economy. And the European energy system has been put to the test.

I am proud to say that it has proven its strength: there is currently no impact on the security of supply for our citizens or businesses. We were prepared. We were resilient.

The other ‘unprecedented’ we have seen in recent weeks is the price of oil dipping into negative territory for the first time ever.

How we respond to these crises in the next few months will come to define the next few years, and even decades, not only in terms of priorities for our society, but how but our choice of investments as a fundamental choice for the future of our society. From this I see both a necessity and an opportunity.

The necessity to ensure a strong and sustainable economy for European citizens in the future. And the opportunity to fast-forward the conversation on climate neutrality in 2050.

That’s why the green agenda must be our strategy for growth and the guiding light to our work going forward.

Where we find ourselves now is a crucial moment. Because the outcome could still go either way. If we hold back, the result will be a backlog of viable projects. Opportunities for Europe wasted. Now is the time to forge ahead: the projects are there, the solutions are available, now is the time to act.

WORK PROGRAMME ACTIONS

The question is how do we forge ahead? My aim is to tackle this opportunity through our work programme plans in three main ways: Energy Efficiency, Renewable Energy and Sector Integration.

Energy Efficiency

First, a clear route to boosting the economy while greening the energy system is the Renovation Wave. If we can enhance building renovation rates across the EU, we get healthier and more energy efficient homes, lower energy bills for European citizens and better energy security.

Now we need to deploy our work even faster for both the consumers and producers of buildings. We are aiming for hospitals, schools and SMEs as the first target areas for investment because these sectors are particularly affected by the crisis.

Renovation work is labour-intensive, and would engage local companies across all Member States, mostly SMEs.

Like most policy areas, we have two potential roadblocks: money and regulation.

For the first, it is essential to find new ways of financing: we are exploring how to leverage more resources using the Structural Funds, the EIB and InvestEU and possibly developing dedicated financial products for building renovation.

For the second, in September I will present the ‘Renovation Wave’, a plan to minimise potential regulatory barriers and stimulate a faster pace of building renovation across the EU.

Offshore Wind

Next, I would like to speak briefly on renewable energy.

Renewable energy offers us a major opportunity for growth in recovery plans.

Projects are cost-competitive and provide at least twice as many jobs as fossil fuel alternatives. That said, the market forecasts we are seeing predict a decline in new renewable projects of up to 33% this year, the market for rooftop solar photovoltaic technology has significantly declined. Although attractive to investors in the long-term, we need to further improve investor confidence to stimulate a pipeline of projects.

I have discussed with the wind industry and I know it has a key role to play here. It is an industrial and technological success story for Europe. But if we want to reach our 2050 goal, we need to increase the contribution of wind energy in Europe twenty-fold

As part of the Green Deal, I proposed the Strategy on Offshore Renewable Energy as a priority for 2020. Just a few months after the Green Deal announcement I am even more convinced that we need to do everything we can to avoid COVID dealing a death blow to this industry. Right now it is struggling with orders falling and broken supply chains.

After the summer, I will present a Strategy on Offshore Renewable Energy. That way, our vision for how to massively upscale this sector until 2050 will be actionable. Also, this is how we send strong signals to the industry that renewables are not only part of the future energy mix, but are indispensable to a clean transition towards climate neutrality.

We will keep the renewables sector at the centre of the recovery plan that the Commission will present this month. Besides major offshore renewable projects, we need to encourage smaller-scale, labour intensive activities. Solar energy can bring solutions not only serving the consumers but also ensuring the building becomes the producer of the energy for tomorrow, the charging station of the future.

It is in our interest to preserve the central role of smart technologies and unlock the renewable potential of our roofs. This is the route to putting the consumer at the centre of the clean energy transition.

ENERGY SYSTEM INTEGRATION

So, I have detailed greater energy efficiency and renewable energy as the first two areas of work. But the third area amplifies the impact of both, bringing them together into one connected system. This is Energy System Integration.

Energy system integration is how we connect the missing links in the energy system. It will guide us on how to increase the use of renewables via electrification, and how to use renewable and low-carbon gases for hard-to-decarbonise sectors while shaping a cleaner, more-efficient system overall. In other words, we are joining the dots. 

Turning this vision into a reality requires action. Including decarbonising the remaining sectors of the economy, in particular those sectors so far dominated by fossil fuels, creating a more flexible power system by storing and transporting low-carbon electricity and making gains on storage and digitalisation.

Central to energy system integration is the deployment of new fuel sources such as hydrogen into the system. This has the potential to be a game changer. Today, its share is less than 1% in our system, and its mainly used as feedstock in the chemical sector. It could act as an enabler, especially for the hard-to-decarbonise sectors like heavy industry and transport.

So hydrogen will be a central element in the Strategy for Energy System Integration that we will be launching in June.

SETTING UP FOR SUCCESS

These are our key areas of work: the renovation wave, offshore wind energy and energy system integration. We have our way forward. But there remain a few pieces of the puzzle that need to be implemented in parallel to support these actions.

First, is the Clean Energy for all Europeans Package, which we adopted back in 2016. Here we planted the seeds for our push to carbon neutrality. This framework lays a solid foundation for our 2050 targets, and I am working with Member States to see its full implementation.

Part of that is the important work of the National Energy and Climate Plans. Now more important than ever, they will be the compass for directing the Green Deal investment under the future Recovery Plan.

The national plans are the precondition to step up ambition for our goals. On this basis, we will know our level of collective ambition for achieving the current 2030 energy and climate goals, and the data will feed into the process of increasing climate ambition for 2050. I have called on the Member States to ensure that they are coming with ambitious plans but we are still missing a few plans.

As we know, the deadline was the end of last year. We are still missing a few. Last week we had the Informal Energy Council. Those Member States that are still to present theirs have promised do it as soon as possible despite the current crisis.

I cannot repeat it enough, without all plans it is difficult for the Commission to complete its assessment! I had planned to come with a first intermediary assessment before the summer but I have decided to wait for all plans to be in.

It is urgent we receive the remaining plans if we want the assessment of the cumulative impact of EU level contribution and specific situations per Member States make an impact on the Comprehensive plan for 2030 climate ambition.   

Next, creating a vision for a de-carbonized energy system is incomplete without the modern infrastructure to go with it. So, by the end of the year we will table a proposal for the revision of the TEN-E regulation.

Finally, one important piece of the puzzle is the Carbon Border Adjustment Mechanism. It would address carbon leakage and make sure that our ambitions don’t work in isolation. But it should be WTO compliant and compatible with the Paris Agreement. Right now, the Commission and led by my colleague Commissioner Gentiloni are working on the Impact Assessment and exploring pilot sectors where a mechanism could be useful.

 

Dear Colleagues, to conclude, I have laid out our bigger picture for the energy system of the future, and how we intend on getting there.

Most generations are forced to deal with how they create a better world for their own generation. We have the unusual task, but also the opportunity, to tackle at once the biggest challenge of our own generation while preventing the biggest challenge for the generation of tomorrow.

If I could convey anything to you today, it’s that this is not the moment to pull back from investments in clean energy, it is the moment to double down.

We have clear plans, we have significant ambition, the final piece of the equation is determined action to push us forward onto the road to recovery and towards our destination of a climate neutral 2050.

Once again, green and digital investments will be the major pillars for our Recovery Plan.

Thank you for your attention.