The new en­ergy land­scape and the 6 Ds

Speech by Euro­pean Com­mis­sion Vi­cePres­i­dent Maroš Še­fčovič, in charge of En­ergy Union, at the Cit­i­zens' En­ergy Fo­rum in Dublin

The Malta Business Weekly - - LEADER / OPINION -

I am very pleased to be able to join you here in Dublin as the Cit­i­zens' En­ergy Fo­rum is about to con­clude, for the 10th time.

You have had in­ten­sive dis­cus­sions and I have been lis­ten­ing with great in­ter­est to your find­ings. Thank you Klaus-Di­eter for this in­ter­est­ing wrap-up, you have no­tably fo­cused on what is im­por­tant and needed for the en­ergy re­tail mar­ket to bet­ter serve con­sumers.

In­deed we need con­crete so­lu­tions to en­sure not only more com­pet­i­tive­ness, but also fair­ness, and con­sumer en­gage­ment.

My col­league Miguel Arias Cañete yes­ter­day de­scribed the new en­ergy land­scape – where we stand on the low car­bon tran­si­tion, with our am­bi­tious yet re­al­is­tic en­ergy and cli­mate tar­gets.

Let me re­call in one sen­tence some of the dy­namic changes that are shap­ing our sys­tem: the share of re­new­ables and de­cen­tralised gen­er­a­tion have been grow­ing rapidly, call­ing for more flex­i­bil­ity in the en­ergy mar­ket; the pro­gres­sive in­crease in en­ergy-ef­fi­ciency along the en­tire en­ergy value chain - and, fi­nally, the emer­gence of new mar­ket roles and ac­tors with "pro­sumers" as ac­tive par­tic­i­pants.

These mega-trends are what I de­scribe schemat­i­cally as the 6 "D"s … for: De­car­bon­i­sa­tion – De­cen­tral­i­sa­tion – Democrati­sa­tion – in­no­va­tive Dis­rup­tion – Digi­ti­sa­tion and Di­ver­si­fi­ca­tion (of both pro­duc­tion and end-uses).

And all these 6 "D"s all have the con­sumers at their cen­tre-stage.

With the Clean En­ergy for all Euro­peans pack­age we want to see con­sumers, and pro­sumers, take full ad­van­tage and own­er­ship of the en­ergy tran­si­tion.

In fact, it will be the most ad­vanced set of leg­is­la­tion for en­ergy con­sumers ever to be estab­lished in the EU, pos­si­bly even the most ad­vanced of any ma­jor econ­omy.

We are there­fore putting in place rules to democra­tise and de­cen­tralise the pro­duc­tion, stor­age, trans­port and use of en­ergy.

Rules to en­sure that con­sumers have the right to store, sell and gen­er­ate elec­tric­ity them­selves, to give them ac­cess to new prod­ucts such as dy­namic price con­tracts and de­mand re­sponse – and new ac­tors such as en­ergy com­mu­ni­ties – while mak­ing it eas­ier for con­sumers to com­pare and switch of­fers and to un­der­stand their en­ergy bills.

These mea­sures are com­ple­mented by the New Deal for Con­sumers pack­age to make sure that our con­sumer pro­tec­tion rules are mod­ern and keep pace with mar­ket de­vel­op­ments, es­pe­cially the dig­i­tal econ­omy and new busi­ness mod­els.

It is clear that con­sumers al­ready play a new role in the en­ergy sys­tem - the en­ergy chain is no longer a one-way street with tra­di­tional sup­pli­ers at one end, and pas­sive con­sumers at the re­ceiv­ing end. In a more de­cen­tralised en­ergy sys­tem con­sumers not only need to be pro­tected. They ac­tu­ally con­tribute to mak­ing the sys­tem work.

Peer-to-peer en­ergy trad­ing is emerg­ing and res­i­den­tial de­mand re­sponse needs are ar­eas where the en­ergy mar­kets will de­velop greatly in the com­ing years, with tech­nol­ogy play­ing a key role in en­abling these so­lu­tions at low cost.]

The num­ber of those who want to en­ter en­ergy mar­kets as gen­er­a­tors of en­ergy – the pro­sumers, is grow­ing. The in­te­gra­tion of pro­sumers elec­tric­ity into the mar­ket and their trans­par­ent and fair par­tic­i­pa­tion needs to be sup­ported by ap­pro­pri­ate mar­ket rules that truly em­power the con­sumers to act.

Grass-root and cit­i­zens ini­tia­tives, for ex­am­ple en­ergy com­mu­ni­ties are im­por­tant to in­crease the up­take of the re­new­able en­ergy and to achieve the en­ergy tran­si­tion by di­rectly in­volv­ing the cit­i­zens as own­ers and bene­fac­tors of re­new­able en­ergy. So democrati­sa­tion goes hand in hand with de­car­bon­i­sa­tion.

It is im­por­tant to en­cour­age these de­vel­op­ments in Europe, in or­der to make sure that cit­i­zens feel re­warded by their par­tic­i­pa­tion in the tran­si­tion.

Tech­no­log­i­cal changes and dig­i­tal­i­sa­tion are al­ready key at­tributes of to­day's en­ergy mar­ket and are cru­cial in driv­ing shifts in en­ergy re­lated be­hav­iour. They also cre­ate new value and open new op­por­tu­ni­ties for both busi­ness and con­sumers.

This brings me to my next point: Re­shap­ing the en­ergy re­al­ity for con­sumers can­not hap­pen with­out the in­volve­ment of the busi­ness sec­tor, in­clud­ing front-run­ners: in­no­va­tive and con­sumer-ori­ented com­pa­nies that en­able en­gage­ment in the en­ergy mar­ket through new ser­vices and prod­ucts.

Dis­rup­tive in­no­va­tion and new busi­ness mod­els do not come from scratch.

To push these we need to work bet­ter with in­no­va­tors and pri­vate in­vestors. This is what we are do­ing for in­stance by part­ner­ing with Bill Gates and his Break­through En­ergy Coali­tion of ma­jor in­vestors, to at­tract pa­tient cap­i­tal into our world class, dis­rup­tive, ci­ti­zen-driven, clean en­ergy in­no­va­tive, so­lu­tions.

At the same time, we must en­sure that con­sumers un­der­stand and em­brace those changes. They have to be both well pro­tected and in­formed to con­fi­dently nav­i­gate through this new mar­ket re­al­ity and make the most out it.

This year, we have launched the EU En­ergy Poverty Ob­ser­va­tory, to bet­ter grasp and tackle the chal­lenge of en­ergy poverty. Our ob­jec­tive is to ul­ti­mately en­sure that all cit­i­zens have ad­e­quate liv­ing con­di­tions, in­clud­ing heat­ing, in­su­la­tion and pow­er­ing.

Let us not for­get that trans­form­ing the en­ergy sys­tem for con­sumers re­quires joint ef­forts, en­gage­ment and cit­i­zens' fo­cus at all lev­els – EU, na­tional, re­gional and lo­cal.

That is why we are work­ing through ded­i­cated ini­tia­tives (Euro­pean and Global Covenant of May­ors) with cities - rep­re­sent­ing the level of ad­min­is­tra­tion clos­est to cit­i­zens'; and fo­cus on spe­cific needs of Coal Re­gions in Tran­si­tion and EU Is­lands.

Let me con­clude on Ire­land and Europe.

First, Ire­land is very much at the fore­front of the clean en­ergy tran­si­tion, with its com­pet­i­tive and in­ter­con­nected en­ergy mar­kets, re­new­ables in­te­gra­tion, and a deep­rooted fo­cus on in­no­va­tive / dis­rup­tive tech­nolo­gies and en­tre­pre­neur­ial spirit.

Sec­ond, this Fo­rum has been mak­ing im­por­tant con­tri­bu­tions to our un­der­stand­ing of con­sumers' views, and needs. With­out it we would not have been able to pro­pose rel­e­vant adap­ta­tion of the Euro­pean reg­u­la­tory frame­work. I am there­fore very happy that it took place this year in Ire­land – to show­case the im­por­tant con­tri­bu­tion of your coun­try to our Euro­pean pro­ject - and our un­com­pro­mised de­ter­mi­na­tion in re­turn to sup­port Ire­land, as a key mem­ber of the Euro­pean Union, in the chal­lenges it is fac­ing.

We still have some work to do, of course. So, I am pleased to be able to take your con­clu­sions with me, es­pe­cially at the mo­ment when the Com­mis­sion is gath­er­ing in­puts for the mid-cen­tury strat­egy.

It is a key mo­ment to dis­cuss not only our re­duc­tion of emis­sions of course, but also the moderni­sa­tion of the Euro­pean econ­omy and how to fos­ter so­ci­etal ac­cep­tance for and own­er­ship of the clean en­ergy tran­si­tion.

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