The European Union will continue to assist and support the transition to a low-carbon economy, especially for countries with economies that are energy and carbon intensive, European Commission Vice-President for Energy Union Maroš Šefčovič said in Katowice. He noted that Poland has played a key role in integrating Europe’s energy markets. Šefčovič visited Poland for the second Energy Union Tour on May 10-12 where he met with Polish Energy Minister Krzysztof Tchórzewski to discuss the changes facing the Polish energy sector.
“The solidarity mechanisms under the EU Emission Trading System will help ten EU countries weather this transition. Poland will benefit greatly from this solidarity mechanism. Apart from this, the EU Structural and Cohesion Funds, the European Fund for Strategic Investments, the Horizon 2020 programme devote significant proportions of their budgets to the objectives of the Energy Union: i.e. competitive, sustainable and affordable energy,” Šefčovič said at an opening speech at the 9th European Economic Congress in Katowice on ‘The energy industry in Europe – the most important questions’.
“To give an example, through 24 national and regional programmes, Poland has been allocated 86 billion euros from ESI Funds over the period 2014-2020, which is an annual budgetary effort equivalent to nearly 3% of Polish GDP. Out of this, around 19 billion euros will be invested in projects contributing to the Energy Union objectives in Poland. And of course, other than funding, the EU can provide a great level of technical assistance, creating synergies and spill over of best practices across Europe and the rest of the world,” he said.
Turning to the global energy landscape, Šefčovič noted that the balance of power is being significantly redrawn and its main supply and demand centres are constantly changing,” he said.
On the supply side, Šefčovič noted that the US gas deliveries to Europe are becoming a reality. Poland is one of the frontrunners with the first cargo expected to arrive in Świnoujście LNG terminal in June. At the same time, the stability and reliability of Russian gas flows into the EU have been put constantly into question, even though our experience with transit through Ukraine is positive and Ukraine has been a reliable transit country, he said, adding that the European Commission is working intensively to ensure gas supplies from the Caspian region before 2020.
“The gradual removal of sanctions from Iran and new discoveries in the Mediterranean may also create potential new and returning exporters. On its end, Poland is actively pursuing the Northern Gate project, which could lead to a major change in gas supplies in Central and Eastern Europe,” he said.
On the demand side, Šefčovič noted that the underlying trend is that global energy demand is expected to continue to increase by over one third, or by nearly 5000 Mtoe, up to 2040, mainly driven by emerging economies. China and India alone are expected to represent just under half of the total increase in global energy demand.
Meanwhile, the share of the European Union in global energy demand is expected to decrease. In 2012, the EU accounted for just over 12% of global energy demand. This is expected to be reduced to just over 8% by 2040.
“But while the overall importance of the EU on global energy markets will decline, global energy markets will be increasingly important for the EU. Why? Because almost 70 % of the gas and almost 90% of the oil used in the EU is imported today. By 2040, we estimate that imports could account for over 86% of the gas and 100% of the oil consumed in the EU as our domestic production of these fuels decreases,” he said.
“We will partly offset this increasing dependence on imported hydrocarbons by continuing to promote the growth of renewable energies and with vigorous energy efficiency measures,” Šefčovič said.
So far, the majority of EU’s imported oil and gas comes from the bloc’s wider neighbourhood – from Russia, Norway and Algeria, he said, adding that given the relatively few sources and routes, which supply the European market, a lot has been done to strengthen the EU’s energy security since the previous crises in 2006 and 2009. This includes new inter-connections inside Europe and reverse flow capabilities on key gas pipelines, which have reduced the number of Member States exclusively dependent on one single supplier.
“In all of this work, there has been a growing realisation that a more decisive and co-ordinated approach is necessary in order to face the growing energy challenges and at the same time address climate change,” Šefčovič said, adding that this led to the agreement of the EU Heads of State and Government in March 2015 that an Energy Union with a forward-looking climate policy should be one of the overarching priorities for the future.
He referred to “the tremendous role of Poland” in integrating Europe’s energy markets, conceptualised by Jerzy Buzek and Council President Donald Tusk who revived the legacy of Jacques Delors. “The Energy Union now encompasses five areas where the EU needs to seek collective answers to these global changes: in energy security; in the way our internal market in energy functions and delivers welfare for EU citizens, businesses and industry; in the way we consume energy, trying not to waste this important resource by further increasing our energy efficiency; in the way we deal with climate change for the benefit of future generations; And finally in order to strengthen our competitiveness and innovation,” Šefčovič said.
“Most recently, we have concluded the legislative process on proposals concerning the first dimension of the Energy Union that I mentioned, namely energy security and solidarity: we will have much more transparency in intergovernmental agreements on gas and in commercial gas contracts; we will have better regional cooperation in potential supply crises between EU Member States. All this has been strongly supported by Poland,” Šefčovič said.
He reminded that Poland is already a champion in many aspects of the industrial and energy transition.