ENVE-VI/003
3rd Commission meeting, 4 May 2015
WORKING DOCUMENT
Commission for Environment, Climate Change and Energy
Energy Union Package
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Rapporteur: Pascal Mangin (FR/EPP)
Regional Councillor of Alsace
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This document will be discussed at the meeting of the Commission for Environment, Climate
Change and Energy to be held from 11 a.m. to 6 p.m. on 4 May 2015.
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Reference documents
Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee, the Committee of the Regions and the European Investment Bank:
Energy Union Package - A Framework Strategy for a Resilient Energy Union with a ForwardLooking Climate Change Policy - COM(2015) 80 final - 25.2.2015.
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On 25 February 2015, the European Commission presented the White Paper on the Energy Union.
The purpose of the document is to define the European Union's energy policy for tomorrow. The
Energy Union, one of the EU's major political priorities, should enable Europe's dependence on fossil
fuels to be reduced considerably by removing obstacles to the flow of energy in a fully-integrated EUwide energy system, while taking account of the climate change issue and the imperative of the
security and competitiveness of EU energy supply.
The Energy Union rests on five pillars:
1.
2.
3.
4.
5.
guaranteed supply,
a single energy market,
energy efficiency,
reduced emissions,
energy research and innovation.
The combination of these five pillars must allow the European Union to pursue the creation of an
internal energy market, to renew its infrastructure, reduce energy prices and dependence on imports,
while fully integrating renewable energy sources into the energy mix. Connecting European electricity
grids is one of the main priorities, with all Member States having to create electricity interconnections
by 2020 allowing at least 10% of the electricity produced on their territory to be transmitted to
neighbouring countries.
It should also be pointed out that energy is a pillar of the European Union's territorial and social
cohesion. Located at the crossroads of economic development and European competitiveness, it is
also a crucial asset for the present and future well-being of European people. Electricity is moreover a
key vector for the digital economy and the development of a smart economy, and especially for smart
electricity grids; it is at the very heart of the challenges of innovation and social links within the
Union. The debate on how to ensure the security of electricity supply must necessarily cover these
new elements.
I
Basic features of Europe-wide energy
The European Union has a significant regulatory framework in place for energy, but at the same time
still has 28 sets of national legislation. The Member States retain sovereignty in choosing their energy
policies, particularly in defining an energy mix reflecting the specific features of each country.
However, it remains the world's leading energy importer, with an overall bill of some EUR 400 billion
a year.
The significant development of renewable energies, sought by the various Member States and at the
heart of successive Energy-Climate packages, has led to the creation of a patchwork of public support
and aid systems that has been extremely costly for both public finances and European consumers. Not
only has it had an impact on the reliability of the European electricity market, requiring the
development of various costly and imperfect mechanisms, such as the capacity markets, in order to
remedy this, but the development of renewable energies leads simultaneously to increased pressure on
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ageing infrastructure that is unable to cope with the large-scale arrival of decentralised and
intermittent production, or to seize emerging opportunities (primary resources, land prices, etc.)
widely separated from the areas of consumption, in turn requiring the creation of new and costly
infrastructure. This support for the development of renewable energies and the resulting upward
movement of prices has been passed on to consumers through various mechanisms.
More broadly, the large-scale arrival on the electricity markets of "subsidised" production that has
priority network access is pushing market prices downwards (appearance of negative prices) and
prevents sending messages encouraging investment in "conventional" production tools, which are
however essential to making the Union's electricity supply environment secure and offsetting the
impact of intermittence on the European electricity system. The European Commission quite rightly
points out that "in line with the Environmental and Energy Aid Guidelines, renewable production
needs to be supported through market-based schemes that address market failures, ensure costeffectiveness and avoid overcompensation or distortion".
The European electricity system is currently fragile and crisis-ridden. It faces a dual paradox. Firstly,
it generally has production overcapacity while at the same time the security of the electricity system is
at real risk. Secondly, the development of renewable energies, especially photovoltaic, has gone handin-hand with a rise in CO2 emissions and a worsening European CO2 footprint that can be attributed to
massive imports of this equipment and also the renewed competitiveness of coal in generating
electricity due to the collapse of the carbon market and the impact of increasing non-conventional
gases on the world coal market.
For consumers, the impact of the growth of major intermittent generation capacity has meant high
costs, essentially due to taxes relating to support mechanisms for renewable energies. The
disadvantage of these mechanisms is that they do not allow for fair payment for the necessary
reception capacity of electricity networks and therefore tie up investment capacity in network
infrastructure which is however essential to security of supply through stronger regional solidarity and
interconnections. The introduction of digital technologies to grids unquestionably presents an
opportunity for innovation and probably rationalisation of investment. As the digitisation of energy
systems advances, however, an answer must be found at European level to the thorny question of
access to energy data that matches the risks and opportunities: "existing legislation and new market
rules need to be fully implemented, enabling the roll-out of new technologies smart grids and demand
response for an efficient energy transition".
The difficulty experienced by many European citizens in paying their energy bills does not stem only
from the energy price issue. It also arises from a combination of many factors concerning not only
energy policy choices but also regional planning policies and the lack of financial and technological
solidarity within the Union.
The Committee of the Regions therefore states its support for energy solidarity between consumers by
means of energy bills. The implementation of these provisions must be flanked by greater
transparency so that all consumers can see the cost of this energy solidarity on their energy bills.
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II
The Energy Union as a European springboard for energy
The European Commission's emphasis on the Energy Union is to be applauded, as this is a key issue
for the EU'S regions. The urgent need to tackle climate change, the economic difficulties of people in
Europe, widespread youth unemployment together with an unstable geopolitical context all argue in
favour of creating an effective, pragmatic and sustainable Energy Union - in other words, one that
makes sense for its people in their everyday life as consumers. This initiative on the part of the
Commission, which now looks at the question of energy supply at EU level rather than at individual
Member State scale, should be encouraged.
In the light of the above, it should be emphasised that the Commission's aim of facilitating an
overhaul of support mechanisms for renewable energies by abolishing feed-in tariffs and replacing
them with direct sale of produced energy is a positive step.
Local authorities have a decisive part to play in setting up the Energy Union. With their detailed
territorial knowledge, the regions are a vital link in the energy transition chain. The following actions
would make a significant contribution to this:

Creating a European territorial forum
The multiplicity of local-scale experiments and burgeoning initiatives deserve to be networked. An
initiative of this kind could quickly bring real added value both locally and at Union level, due in
particular to feedback from experience and harnessing of best practices. It could also facilitate savings
by channelling funds towards efficient models.
The forum could also research and promote methods to increase the public acceptability of energy
transition projects. In addition, it would be capable of forging close links between rural, urban and
suburban areas on a European scale. Such an initiative could be launched or, at least, supported by the
Committee of the Regions.

Contributing to the difficult task of defining how to ensure the security of production
needs
Local and regional authorities make possible a real approach to making production needs secure. They
are in a position to take part in devising economic models for optimal location of means of
production, while making it easier for them to be accepted by local populations. The development of
smart grids and, more broadly, the optimisation of innovation in the field of energy efficiency,
renewable energy sources, soft mobility and carbon capture and storage could be reproduced on a
large scale and applied at local level. In keeping with the principle of subsidiarity, the European
Commission could encourage the development of binding regional energy system development
schemes.
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
Ensuring the presence of local and regional authority representatives on the European
Agency for the Cooperation of Energy Regulators (ACER) and among national regulators
The importance of regulation and of broadcasting the right price-signal so as to enable the
development and optimal location of infrastructure and means of production means that regulators'
powers must be reinforced, but also that specific local and regional factors be taken into account. The
presence of a Committee of the Regions representative among ACER members would ensure that the
territorial dimension is taken into account. The national regulators could, where necessary, be urged to
include a representative of the local and regional authorities.

Defining energy poverty at European scale
Identifying people suffering from energy poverty is a priority. There must be an analysis, using
multiple criteria, of what causes European citizen-consumers to have difficulty in withstanding the
rising cost of energy, so that energy poverty prevention programmes can be planned and
implemented.
At present there is no consolidated Europe-wide definition of energy poverty. Work must get
underway to achieve this. A definition will make it possible to frame targeted policies, particularly for
each region or local area, to combat energy poverty.

Making energy a pillar of territorial cohesion
Energy potential naturally varies locally, with significant inequalities. The development of energy
resources in areas with major potential must be fostered at the same time as inequalities are reduced in
order to bring energy solidarity to the core of the Energy Union.
To this end the European Commission's communication, which aims to reach the target of 10%
interconnection in the electricity sector, should be hailed as it represents a necessary step.
The 10% interconnection target would be more easily achieved by developing innovative financial
structures bringing together local and regional authorities, in particular in order to mobilise the
Structural Funds. Such structures must take account of the interactions and strengths and weaknesses
of each of the territories concerned, as part of a pragmatic approach to security of supply and effective
solidarity.

Using cross-border areas as Energy Union test-beds
All too often, as a result of the border effect, together with the varying and divergent legislation on
each side of borders, cross-border areas are at a disadvantage or are unable to fully harness their own
potential.
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This is particularly true of energy. For example, sharing renewable energy is difficult to carry out
across a border, although an initiative of this kind could significantly cut the costs of strengthening
grids. Consequently, it must be possible to foster the development of connections between distribution
grids by means of an appropriate legal and regulatory status.

Achieving energy efficiency by mobilising at local level
Setting up highly technological industrial sectors, facilitating active management of demand, smart
energy use and energy efficiency, must be the priority for the Energy Union. This commitment
represents the primary source of gains that would flow from energy competitiveness, reduced CO 2
emissions and non-relocatable jobs that would be rapidly accessible.
Local and regional authority environmental, mobility and planning policies can serve as powerful
levers to boost energy efficiency. Due to their proximity to consumers, they are an irreplaceable actor
in mobilising training systems for energy efficiency. The overall challenge is to define a lasting
economic model that can mobilise private funds.
In brief, the Energy Union must put energy efficiency at the heart of local and regional concerns, as
local and regional authorities are capable of mobilising local resources, of developing the best-suited
techniques, of innovating and of creating local jobs. Pooling best practices and developing a network
of demonstrators are however preconditions for boosting the effectiveness of policies in this field.
Care must be taken to ensure that local authorities are involving in rolling out the Energy Union. The
purpose of the recommendations contained in the present opinion is to create and implement the
territorial dimension of the Energy Union. Here again, in keeping with the principle of subsidiarity, it
will be necessary to examine how best to involve the local authorities, who are well-placed to
contribute actively to the successful implementation of this proposal by the European Commission.
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