- “Now, as we will continue to need natural gas in our system over the coming decades, we will need to import some domestic production coming online. But it's very, very limited. And so we will need imports. We need to make sure that those imports are diversified so that they don't constitute a security of supply risk. We have already seen with the dependence on Russian gas, how significant that was. As you're also suggesting, we have to make sure that we do not replace one dependency with another. We are now the largest buyer of LNG globally, the European Union, the 27 member states collectively, and we will remain parties to the global LNG market over the coming decades, because we will still need fossil gas in our in our energy system. So what we need to make sure again is that we reduce that, but also that as long as we still are importing fossil gas, we do it in the in the smartest possible way. And that's why we are engaging with a variety of global LNG suppliers. Thank you.”
Natural gas · EU approach to energy security (home-made vs import sources) · EU policy on gas storage targets
- “Thank you very much for the question. So indeed, we know that while the transition will reduce significantly the cost of energy over time, the challenge is the coming years where we are still at the in the transition and still dependent on external fossil supplies. And while we do not yet have a fully integrated energy union energy market to deliver that lower cost and that cheaper, cleaner, cleaner energy, and that is part of what the Clean Industrial Deal and the Affordable Energy Action Plan aim to address is to make sure that we are equipped for this transition so that industry and households draw the benefits from the transition, rather than pay an additional cost. And as I think your question suggests, it is important not to put ourselves in a situation where there are shortages or lack of security of supply because that would drive up prices. We've seen that over the last few years. And so important to maintain security of supply through our diversified supply route for the fossil fuels we still need in our system, and to accelerate the build out of of clean energy sources across across the European Union. Thank you.”
Energy (green transition) · EU approach to electricity market and prices · EU approach to energy security (home-made vs import sources)
- “That is also what we've been doing and offering to Hungary, but to a number of other member states that have been particularly impacted by by high prices. So to be absolutely clear, we are working to lower consumer prices across the European Union with the Affordable Energy Action Plan, but also with in working directly with member states and and and guide them as as needed as regards the grid package. Indeed, what we do see with respect to planning is that the if you if you plan our grids and our cross-border infrastructure only on the basis of national plans and ten year national development plans, you will see gaps compared to what is needed in in the optimal in the best possible energy union and integrated market. Those are some of the challenges that we will be taking up in the grids action plan. Looking at how do we make sure that projects that are of a common interest or a regional interest will also be, will also be addressed? We see that the Connecting Europe facility has been a very, very useful instrument, a very useful program, and we see a significant interest in financing from that program. And so hopefully that will remain there as an important factor in our energy system. As you pointed out, questions around cost allocation and cost benefit sharing in large cross-border projects is a challenge. We have already established guidance to member states, so to help do that, but we may need to go further to further facilitate this.”
EU approach to electricity market and prices · Energy (green transition) · EU energy infrastructure integration
- “Thank you very much indeed. The continued dependence on imported energy is a significant driver of high energy costs and and of course, of uncertainties and insecurity, more so in the current geopolitical context. And so replacing that as quickly as possible with clean energy, renewable energy, nuclear energy in the member states that have nuclear energy is a way to reduce that dependence and reduce that risk. These investments, or this increase in deployment of renewable energy and other energy sources, will have to come together with investments into grids, into interconnectors, cross border into flexibility and into storage so that we can make full use of energy of the energy that we generate, including when prices are low. We currently see quite significant times of negative prices across the European Union, really depending on the weather. Negative prices means that we are wasting energy, and so we need to have the flexibility and storage so that we can make use of that energy that is, that is currently in surplus at parts of the time. So there are significant investments and actions that can be taken to limit curtailment, to limit negative prices, and to make use of the energy that is in the market. And that will help our industry and households directly. And as regards the decision to close nuclear power plants, that is a national decision. As mentioned in my in my previous answer, we do not currently have instruments that would allow an intervention into those into those decisions. Thank you.”
EU approach to electricity market and prices · Energy (green transition) · EU approach to energy security (home-made vs import sources)
- “Thank you very much for the for the question. So as regards the state of renewables across member states, on the whole, what we have seen during the crisis is a significant acceleration in the deployment of renewables. Some member states have made full use of the the possibilities to accelerate permitting, and we see that the member states that have made full use of these legal instruments have had significantly better results. So we are working with member states across the European Union to help them make best use of the possibilities that are there for accelerated processes, and again, continue to look at what more can be done to to accelerate permitting, because that is one of the key factors that that slow down. On the question of the renewable electricity prices, renewable energy is currently the cheapest source by some margin. Now, the final electricity price, the bill that consumers paid is a result of a number of factors, including both tariffs and taxes and the energy supply and of course, the price formation in wholesale markets. It's one of the key objectives of the electricity market. Design was indeed to decouple from gas prices. In order for that to happen and for consumers to see the benefit. We need to see a much wider rollout of power purchasing agreements. Contract for difference where there is state aid involved, and we need to make sure that consumers have the ability to use the instruments to shape their electricity bill and to have the best possible contract.”
EU approach to electricity market and prices · Energy (green transition) · EU policy on permitting for renewable energy projects
- “Thank you very much. Indeed, the action plan is very much on very much about action and moving from from policy and from frameworks and legislation to implementation action and results for industry and for for households. And a lot of the action that can and, and will be taken is national action. So to give you one very concrete example, the composition of the energy bill is fundamentally the same across the European Union. You've got the energy source itself, you've got tariffs and you've got the taxation element. In some European Union member states, electricity is subject to a fairly high taxation rate, which of course does disincentive, does not provide an incentive for the, for the for the electrification of industry. So that is one action that member States can take already now under the current legal framework. Similarly, we know that the tariffs are an important part of the electricity bill of of consumers, and we know that that share will probably remain quite high in coming years because we will need these significant investments. But what we can do is to make better use of the tariffs. So the tariffs help drive consumption at times where prices are low, where there is less congestion.”
EU approach to electricity market and prices · Energy efficiency
- “Thank you very much for the invitation. It's very good to to be here. There is a lot happening in in energy policy and the energy sector. So it is a good opportunity to to meet you and and listen to you. Now Commissioner Jorgensen has presented this action plan in plenary already. I think I would go through briefly the structure, the main components and then have time to to hear your your comments and of course to answer any questions you you may have. Um, as you know, the Affordable Energy Action Plan was part of the Clean Industrial Deal, a wider package to improve European competitiveness. But given the importance of energy prices and energy costs in our competitiveness, there is a separate action plan on on energy. It builds on four pillars, and I will go through these. And the concrete actions set out in in the pillars. Now the first point is simply to lower energy prices. So lower energy costs. And I used the word simply. That was probably not the right word. It is not simple to lower energy costs or energy prices, but we do know that there are things we can do both short term and more structurally. We need to make electricity bills more affordable. There are ways that member states can already do that. In the current regulatory and the current legislative framework. They can lower taxes on electricity, and they can use tariffs for in a more cost efficient manner. So there are things that can be that can be done there.”
Energy transition (state support) · EU approach to electricity market and prices
- “So for the current fleet, for safe, for safety and safeguards, of course, but also investment needs in in the in in additional capacity. Now we have done quite a lot on the nuclear energy sector these past years. The electricity market design, for example, covers nuclear and renewables in exactly the same way with respect to power purchasing agreements and contracts for difference. You will also see in the Affordable Energy Action Plan that we refer to, to clean energy as a as a more generic term, wherever that is relevant and sometimes referred to renewables, where that is the appropriate term, because we do have specific rules around around renewables. Now, the decision of member states to either invest in new nuclear. We have some member states that are doing it or to close down their nuclear generation capacity is a national decision, and there's not currently any possibility for the for the Commission or for the European Union to engage in that, although we do recognize that those national decisions, of course, have an impact on the overall supply across the European Union and therefore subject hopefully to conversations with with neighbouring countries and countries in the region in particular.”
Nuclear energy · EU approach to electricity market and prices
- “We know that we are now increasingly dependent on global LNG markets. So there are things we need to look at in the functioning of our gas market and of course, our participation in the global LNG market. We have established internally a task force really looking at how do gas markets function, what were the issues that could have been improved during the crisis in relation to the financial market aspects of gas, and how do we best play a role in global gas markets, including through continuation of demand aggregation, but also moving into more joint purchasing? And then, of course, we know that energy efficiency is probably the simplest way to reduce the bill and making more efficient use of the energy we have. And so we will be looking at creating more, more effective financial incentives for energy efficiency to have a functioning energy efficiency market. So that was the first pillar. The second pillar relates to the Energy Union, a completion of the Energy Union, where there still is quite a lot to be done. Now, no one has an energy union on on its own. It requires close cooperation, coordination, cross border. And so one of the key parts of this, in terms of making it happen, is to establish an energy Union task force with relevant stakeholders, representatives from from member states, but also from from the energy sector, from industry, to really try to create the political push, the political will to take what at times can be challenging steps towards closer cooperation, closer coordination, and making sure that decisions are reflective of the common European or regional interest.”
Natural gas · Energy efficiency · EU approach to energy security (home-made vs import sources)
- “And we welcome that you are that you are working on that here and look forward to hearing from you on that in the context of security, of supply. I just want to mention as well, of course, that we have suggested an extension of the gas storage regulation. It is a simple proposal really just changing the date. And we would very much hope that the co-legislators can address that with, with some urgency, so that we can be ready for the forthcoming, um, storage for the for the next winter and the next storage filling seasons that will be coming. The last point I want to make is that of simplification. Generally, how do we make the mechanisms that we already have in place function as effectively as possible? One example is capacity mechanisms. And the rules around that, where we have seen significant delays in investments and in the rollout. What we have, what we have done is to suggest a simplification of the process and a measure that will draw on Acer methodology and make sure that we have a common resource adequacy assessment so that we do it as swiftly as possible, but also, of course, that we avoid unnecessary investments. So one example of one example of simplification where we can see that it can bring real results, and one that I know has also given rise to questions and concerns here. And with that, thank you very much again for inviting me.”
EU approach to electricity market and prices · EU policy on gas storage targets · Simplification measures (political compass)
- “We have now created the legal instruments we need to make it happen, and that requires close cooperation with national authorities. As regards the internal Task Force on Gas Prices and Gas Markets, we are working indeed with Acer as well as Esma because you have the financial market aspect. So those two organisations, those two agencies started working closely together during the energy crisis. We need to strengthen that cooperation and that coordination so that we can get the best possible functioning gas markets. As regards the gas storage regulation we have presented several documents. Now, one relates to this storage injection season that starts on the on on the 1st of April, where we recommend more flexibility. Exactly. To avoid this common this this cumulative demand driving up prices and markets. We saw it in August 2022. There were a number of factors at play. But but but that rush to fill storage had an impact as regards the prolonged the recommend the proposal to prolong the gas storage. We are open to look at any flexibility again to avoid that it impacts prices with an upwards drive. And finally, on the costs of nuclear. Indeed, if you look at a comparison of various new build electricity sources, nuclear is significantly more expensive than solar. The lowest cost or wind the second lowest cost. Unfortunately, I don't have the exact amounts here before me, but would be glad to share that. Thank you.”
Nuclear energy · Natural gas · EU policy on gas storage targets
- “Secondly, of course, the the the bill is composed both of taxes, tariffs and the electricity and the energy component in itself. And we can bring down the cost of electricity supply, notably by increasing by accelerating the build out of clean, clean energy through a further reduction of permitting times, of better use of the current rules, and looking at what is needed to further reduce permitting times. We have also taken significant steps, together with the co-legislators, to decouple the electricity bills of consumers from the high and volatile gas prices. The electricity market design set out a number of instruments to achieve that, primarily through power purchasing agreements and contract for difference and using them in the best possible way. So we will take further steps, including with the European Investment Bank, to make that a reality and to strengthen and increase the share of power purchasing agreements in particular. Then we know, and this is more long term, that we are going to need significant investments into grids, into flexibility and into storage in order to further reduce energy prices and make good use of energy when the costs when the prices are low. So we will be coming forward later this year with a grid package to accelerate the build out and investments into grids. The third point, as part of this lowering energy costs and energy prices is the gas prices. We know that the high and volatile gas prices have been the driver of higher European prices.”
Energy (green transition) · EU approach to electricity market and prices · EU policy on permitting for renewable energy projects
- “Thank you very much for the question. So indeed, the European energy system as a whole still has a significant component of fossil energy, primarily for transport and industry and heating and and cooling. We know that between now and 2050, the share of fossil energy in the overall energy system is going to reduce gradually going to go down gradually. We know that we will need molecules in our energy system at least until until 2050, as much of those molecules should be clean molecules as possible. But we also know that we will need natural gas, fossil gas, if you will, in our energy system over the coming decades, albeit albeit at a reducing rate. So what we are trying to do with the energy transition across the European Union is indeed to accelerate, scale up as much as possible the deployment of clean energy, which can help reduce the demand for fossil energy. We saw it very concretely during the crisis, where the accelerated build out of renewables and the investments into energy efficiency, energy savings, reduced the billion cubic meters that we had to import from from foreign suppliers. So it works. We have have had a very interesting case study, if you will, over the last three years.”
Natural gas · Energy (green transition) · Fossil fuels
- “Thank you very much indeed. Nuclear energy is an energy source in some member states. Close to half member states, but it is an important common source across the European Union. So in other words, the member states that do not have nuclear as part of their national energy mix typically import nuclear generated electricity from from their neighbors. Our assessment of how to get to 2040 and how to get to climate neutrality in 2050 shows that there will be a continued need for nuclear as part of the European energy system, and at a share very similar to the one we have now. But that will of course, require both lifetime extension of existing nuclear power plants, but also new built nuclear in the the one challenge we see with nuclear is it simply takes longer. So to bring additional supply. Supply of electricity as quickly as possible. Renewables and other sources are faster. Nuclear takes longer, but will be a necessary part of the system. You will see the illustrative programme on nuclear, which is the the assessment of the analysis of what are the investments required in the nuclear sector in the European Union, the so-called Pink Report, which should be coming forward this spring, which will go into more detail, both about investments needed for lifetime extension.”
Energy (green transition) · Nuclear energy · Energy transition (state support)
- “Thank you very much for for all the for all the questions. Um, indeed, in order to have affordable energy, we need to invest more in interconnectors. Cross-border interconnectors are an important feature. We see some gaps in the in the European Union. And we are working to to to fill those. Digitization is both a significant opportunity for our energy system. It can help us be more efficient, make better use of the grids. At the same time, it will be a significant, uh, it will increase electricity demand very, very significantly. And so we need to manage that as we go forward. And that is part of what the the digitization and artificial intelligence plan will address when it comes out later in the year. Closely linked to that is, of course, the issue of cybersecurity, which is also part of what will be addressed both in the security of supply but also in the specific digitization and artificial intelligence plans as regards 2040. We will indeed be presenting a proposal for a target as the as is indicated in the Commissioner's mission letter. Now, as regards national price reduction measures and commission positions on that, we have established what we call a rapid response group, a rapid response task force that travels to member States that have been challenged by price spikes, high periods of very high prices, so that we can help those national governments put in place the best possible measures to help reduce, to reduce pressure on prices, and to do that in a way that is reflective of the of the common legislative framework within the European Union.”
EU approach to electricity market and prices · Energy (green transition)
- “Thank you very much indeed. State aid is is can be relevant in certain situations, but is not the primary instrument that the Commission is suggesting in the Affordable Energy Action Plan. What we are suggesting is that in order to genuinely decouple the electricity prices from the high and volatile fossil prices is to make use of the instruments that the co-legislators have established in the electricity market. Design. Now, power purchasing agreements is the most effective instrument. It does not involve state aid in any form, but allows for companies to purchase electricity at a price that is reflective of the production by renewables, for example, rather than reflective of the entire wholesale of the entire wholesale market, driven by by high and volatile fossil prices. So what we will be doing as part of the Affordable Energy Action Plan is that implementation and follow up to the electricity market design to help make sure that the benefits materialize, as you have also indicated, or as you have also suggested, for the acceptability, for the benefits for for citizens and industry of the transition and of the lower cost energy that will be coming online. Thank you.”
Energy (green transition) · EU approach to electricity market and prices · State Aid
- “One of the interesting features in renewables is that there are specific technologies that are targeted to the agricultural sector. You can see a very useful dual use of renewable capacity that can either provide electrification of the of the of the local industry or of the agricultural sector itself, or can also provide shadow shade where that is needed. So we see renewables being very well fit, a very good fit to the agricultural sector. And some member states have made significant use of that. As regards national hydropower plants, I am aware of the discussions around the environmental aspects of planned hydropower. Indeed, across the European Union, we see hydropower as an important clean energy source, and and further investments into hydropower would be of relevance as we scale up our renewable power generation more generally. Plus, hydropower, of course, has the possibility as pumped hydro to function as a storage mechanism, which is also very important in our in our systems. And as regards the last question on on Russian gas, I think I have responded to that. The road map on the phasing out of Russian gas in the system is, is being is being worked out, including the questions of impact and the strategy. What is the plan and and how to get there. So I hope I have responded sufficiently clearly to to that question. Thank you very much.”
EU policy on permitting for renewable energy projects
- “Can we trust the plans for the build out of clean energy? The project developers, with that scale and with that certainty, can work with their suppliers to lower costs, and the energy intensive industries can invest in the electrification that is necessary in the knowledge that there will be, that there will be the electricity coming, that they will need for that, and at a cost that works for their competitiveness. So that tripartite structure is new in this broader context. But drawing on the experience in the wind power action plan and the solar charter. Now the fourth pillar is crisis preparedness. What we saw during the energy crisis over these last years is that the shortage or the supply concerns were driving up prices very significantly, led to significant to very volatile prices. So we know that preparedness in itself can help lower costs and lower the pressure on markets. We are therefore reviewing our our security of supply framework to make sure that we draw the lessons from the crisis, but also to make sure that the security of supply framework is adapted to the energy market, to the context we are in now with more with more electricity, we see significant risks for critical infrastructure. We see climate risks impacting our energy system, and we see the geopolitical context significantly changed. So things to make sure are fully reflected in the security in the security of supply framework.”
EU approach to electricity market and prices · EU approach to energy security (home-made vs import sources)
- “So you can have more cost reflective tariff structures. That is something that can already be done now at national level. What we will do in the commission is to provide guidance and work with Acer to help incentivise those, those developments. So those are just some of the examples of very concrete action that is available to member states already now. And similarly for power purchasing agreements or for consumer household energy contracts, those instruments are there for power purchasing agreements. We are developing an instrument with the EIB to accelerate the rollout of power purchasing agreements. As regards funding and financing, we need significant investments about €600 billion per year between now and 2030. In the energy sector alone, we know that that will have to be primarily private investments. And so what we need to do is to create the markets where that where that is feasible. It is a good business case. There is a good business case for the investments, provided that we as governments provide the certainty, the clarity and predictability around how the markets function, which is why the electricity market design and the implementation of the electricity market design is so important for affordable energy going forward. Thank you.”
Energy transition (state support) · EU approach to electricity market and prices
- “In terms of completing the Energy Union, you will see a lot more from us over the course of the coming year. Electrification. Increasing the demand for electricity is a key aspect of both the transition and of affordability. So we'll be following up on that heating and cooling, digitization and AI, as well as continued electricity market integration are all aspects that can bring significant savings on the energy bills. So there will be a white paper on the electricity market integration coming next year to launch a common reflection on that, and to help make the change that is necessary for all of this. We know that we're going to need more investments, primarily private investments. So we have two papers on investment coming forward. One is the illustrative programme on nuclear that should be coming in the coming months. And then a wider a comprehensive clean energy investment strategy that will be coming in the second half of the year. And that brings me to the third pillar attracting investment and ensuring delivery. We have had good experience on bringing relevant actors together. You may recall the Wind Power Action Plan, which really was about a charter, an agreement between the project developers, governments and the and the supply chain. We are suggesting a similar tripartite agreement or contract, where you can make sure that governments bring clarity on what is planned.”
Nuclear energy · EU approach to electricity market and prices
- “So new built renewables does not require state aid in most cases, whereas new built nuclear will in most cases require some state aid. And that's why the contract for difference is is a necessary instrument in in the energy sector as well. So that decoupling does take place. We can see that it works in the countries where power purchasing agreements are a factor or a feature where they are deployed effectively. We can also see that there is simply too little of the market currently subject to power purchasing agreements, and so we need to extend that share. That is what we are, that that is what we're working for. As you have rightly pointed out, there are a number of challenges in the development of the European nuclear sector. Skills is is one. The supply chains, the value chains, the overall competitiveness is another one. And we are indeed reflecting on those aspects as part of the of the pink report. So the illustrative report on nuclear that will be coming forward and at some point this this spring, this year, which will allow for a more in-depth both review, assessment and discussion around those challenges. Thank you.”
Nuclear energy · State Aid
- “We see that there are still delays in reaching agreements. So that's another aspect that can be picked up in the grid's action plan when it comes out later, later this year. As regards small modular reactors, there are there are projects in some member states. I think the key factor here and where we see the European Union and Euratom working together, is that safety and safeguards is a common policy and one where, regardless of whether it is small modular reactors or other reactors of nuclear, regardless of where they come from, they will have to live up to the European safety and safeguard requirements. So that gives the certainty and the safety that that we that we do need. As regards the phasing out of Russian gas, we are working on the roadmap that has been announced. It builds on the Versailles Declaration from March 2022, where the 27 heads of state and government agreed to phase out our dependence on, on on Russian energy and, of course, notably Russian Russian gas. In that context, we of course look at how to do it. What can Member States do? But also what are the costs? What is the impact either impact in terms of prices or impact in terms of security of supply, so that we make sure that the roadmap, the plans on how to achieve it, is done in the best possible way without increasing prices or without causing a security of supply issue as regards renewables and agriculture.”
Nuclear energy · EU-Russia relations (from March 2022) · EU approach to energy security (home-made vs import sources)
- “Merci beaucoup. Question. So if I come back to the price setting and the electricity market, we have a well-functioning European wholesale market that ensures The that we do not have blackouts. We have a continued secure supply of electricity at the lowest possible prices. If you want to achieve those two objectives security of supply, stable supply and the lowest possible prices. So the wholesale market is a necessary component of both security and of prices and affordability. Where we can intervene without putting that at risk. Is that the retail price level? And that is what the electricity market design has just revised by the two co-legislators goes in the electricity. The retail price setting can either be done on the market or it can be done on longer term contracts, power purchasing agreement for industry or for for households in the way they want their contracts to function, or if state aid is necessary. And that is the case as regards investments into nuclear, for example, if state aid is necessary through a contract for difference that ensures a lower and long term stable price. And this is the same whether we talk renewables or nuclear. The difference is that the cost, the investment costs related to renewables is significantly lower than the investment costs of nuclear.”
Nuclear energy · EU approach to electricity market and prices · State Aid