Markets & Policies

The Clean Energy for All Europeans Package and The Role of Italy in its Implementation

The Juncker Commission made the Energy Union one of its priorities. The Clean Energy for All Europeans package goes in that direction, as an effort to make the European Union not just a prominent actor of the clean energy transition, but the leader of it.
Much of its success depends on the proactivity of Member States, will Italy be ready to pick up the baton?

Clean Energy for All EuropeansOn November the 30th 2016 the European Commission presented a package of measures named Clean Energy for All Europeans.
The package is aimed at keeping the European Union competitive while the clean energy transition takes place, inevitably changing global energy markets in a permanent way.
The intention of the European Union with this package is to maintain the strength of the European energy sector that employs almost 2.2 million people in over 90,000 enterprises[1], and enhancing it using the energy transition as an economic opportunity, of which the EU will be the leader, and the Energy Union the main vector.
The package envisages a variety of instruments to pursue three main goals:

1. Putting Energy Efficiency first

The Commission describes energy efficiency as being the most universally source of energy available. The cheapest and cleanest source of energy is in fact the one that is neither produced nor consumed.
The Commission envisaged many ways to ensure the highest rate of energy efficiency is achieved, throughout the energy system, tackling many sectors of energy consumption.
One of these is the building sector, addressed in Annex I to the Communication.
As explained in the text of the annex, buildings accounts for 40% of total energy consumption and 75% of them are energy inefficient.
To accelerate the renovation in buildings the Commission has arranged instruments to allow cheaper, easier and sustainable access to financing on the one hand and to tackle the challenges pertaining to the construction sector on the other.

2. Achieving global leadership in renewable energies

The European Union is already strong in the renewable energy sector, with more that 1,100,000 persons employed and global leadership in wind energy[2].
The ambitious target at EU level is to reach at least 27% for the share of renewable energy consumed in the EU in 2030.
This target is binding at EU level, not at Member States level, and this element can potentially threaten the success of the EU in meeting the target.
However, Member States will give their contribution through national energy and climate plans. The peer pressure that would come out of regional consultations and the possibility for the Commission to make recommendations should discourage any free-riding and at the same time encourage Member States to pledge substantial contributions.

3. Providing a fair deal for consumers

The Energy Union puts consumers at the centre of the energy transition, which needs to be fair to all consumers, regions, and sectors affected by it.
The aim is empowering consumers, having more control of their choices, better access to information, and the ability to produce and sell their energy. The package envisages a shift from centralised conventional generation, to decentralised smart and interconnected markets.
The biggest challenge to be addressed when coming down to fairness in the energy markets is energy poverty. The Commissions sets a series of measures aimed at protecting vulnerable consumers. Energy efficiency investments, especially in the building sector, will decrease energy costs and Member States are called to implement energy efficiency measures to protect households affected by energy poverty.

Opportunity instead of Sacrifice and Benefits for All

What makes the proposals of the Commission powerful and likely to be accepted and really lead the energy transition is the way these were presented.
The EU strongly committed to ambitious targets, as during G20 meeting that took place last July in Hamburg.
However, the Commission did not present the Clean Energy for All Europeans package as a way to fulfil its commitments or as a sacrifice that European citizens have to make in order to safeguard the planet.
The energy transition was rather presented as the growth sector of the future. Clean energies attracted over 300 billion euros in investments already in 2015, and this package can generate up to a 1% increase in GDP over the next decade, together with 900,000 jobs. With its efforts in research, development and innovation policies, the EU can really turn the clean energy transition into a tremendous economic opportunity for all.
Consumers, the environment, the industry and the job market will all benefit from the proposals presented in the Clean Energy for All Europeans package, if accepted and implemented.
Sending the message of the energy transition being an economic opportunity instead of a sacrifice or a burden to carry for the sake of environment protection only, the Commission made its proposal a lot stronger.
As always, much of its success will depend on the efforts of Member States.

What Role will Italy Play?

Recently, on the 2nd of August, the Italian Chamber of Deputies approved parts of the Clean Energy for All Europeans Package. Now it remains to be seen how the rest of the legislative process will develop and especially what the implementation of the Commission’s proposals will bring.

Italy’s recently released National Energy Strategy established a target of 5 Mtoe (1 Mtoe per year) of energy consumption reduction between 2016 and 2020, mainly coming from the residential and the transport sectors.
Regarding the increase in renewables Italy is certainly not behind, having already met its 2020 targets in the heating and cooling sector and electricity.
The NES consultation document also proposes stronger support for renewables after 2020.
Generally, the NES is in line with the content of the Clean Energy for All Europeans Package, showing the commitment of Italy in being an active player of the energy transition.
However, the document has no binding legal value, the NES is a policy document and all the measures contained in it will have to be further discussed before becoming actual law. On the top of that, how the country will meet the ambitious targets described in the NES is unclear.

In the words of Jean-Claude Juncker “The Paris Agreement is the first of its kind and it would not have been possible were it not for the European Union. Today we continued to show leadership and prove that, together, the European Union can deliver”.
The European Union will deliver only if its Member States will have the ability, the vision and the cohesiveness to follow up and implement the necessary reforms. Inevitably, some states will be more proactive than others.
What side will be Italy on?
If the energy transition is where the smart money is, will Italy be smart enough?

[1] COM(2016) 769