New challenges require new thinking. The geopolitical, technological, economic and energy landscape facing the incoming Commission is radically different to five years ago. The new Commission needs to implement a strong and forward-looking reform agenda to ensure Europe is responsive to these new realities. In this comment note we outline 7 potentially-transformative propositions to assist the incoming Commission in this task:
- Expand the ‘Capital Markets Union’ initiative to include citizen finance for clean energy investment. Europe faces an energy investment gap as the ability of banks and utilities to finance projects has rolled back. Citizen finance can bring in new capital and lower financing costs.
- Set up a European Energy and Climate Security Observatory to monitor systemic risks. Independent oversight is needed to help Europe address an unprecedented risk landscape and to keep it on track to deliver multiple policy objectives.
- Scale up EU infrastructure funding and link it to delivery of energy efficiency commitments. A better connected Europe is a more resilient one – but a more coherent approach is needed to prioritise best value investment and prevent stranded assets.
- Deliver an internal market package for demand-side energy services. New technologies for flexible demand and decentralised energy have massive growth potential, but need fair and equivalent treatment to the supply side in order to succeed.
- Enact a buildings refurbishment directive. Europe’s leaky, inefficient building stock needs refurbishing, but the current incremental approach has not worked. The resulting increased dependence on fossil imports jeopardises Europe’s energy security.
- Establish regional free trade zones for electricity. Regional-level solutions for renewables trading, system balancing, and infrastructure priorities can capture the benefits of cross-border resource sharing while retaining flexibility for member states.
- End coal subsidies, and set a timeline for retirement of old coal plant. Market-distorting capacity payments for old coal plant undermine investment in cleaner and more flexible power generation, and need to be withdrawn.
Our 7 propositions are explained more fully in the attached commentary.