Chapter News

Speech by Energy Union Vice-President Maroš Šefčovič at the Employment and Social Affairs Committee of the European Parliament

Brussels, 15 June 2016

Mr Chairman,
Honourable Members,
Ladies and Gentlemen,

Thank you for the invitation and putting the social and economic dimension of the Energy Union on your agenda. President Juncker and this Commission made the deliberate choice to organise the Energy Union project around a project team. The reason for this is that a true Energy Union requires more than the coordination of energy policies. We are witnessing the beginning of a true energy transition because of our climate goals and because of new technologies. This transition affects the energy sector in the first place, but it goes far beyond it. In fact, we witness the transition to a low-carbon or even carbon neutral economy. This is in reality an issue of modernisation of our economy. This transition offers tremendous opportunities, for investment, for jobs and for growth. But it also implies change and adaptation in many traditional sectors of the economy. Both, opportunities and challenges, need to be taken into account.

Let me start with the opportunities:

In 2014, the Commission services tried to evaluate the number of jobs linked to the transition to a low-carbon economy. The result was that already in 2014, 9 million jobs were linked to the transition in Europe. What is even more important is that the same study concluded that until 2030, the estimated would double to approximately 18 million people. It concerns sectors on the demand side, notably in energy efficiency; but also low carbon energy supply technologies; and electricity and thermal network value chains, including energy storage developments.

Since 2014, we have seen a new dynamics. The Paris Agreement launches the low-carbon transition at a global level. At the same time, the global need for energy is expected to grow by 30% until 2040 according to the IEA. This seems to be conflicting, but means in reality a massive need for low-carbon solutions worldwide. The question is if Europe, if our Member States and our industries are ready for seizing this opportunity. This will depend to a large extent on having the people with the right skills. The skills challenge must be addressed first and foremost by the Member States, the education systems, the industry and the social partners. Many initiatives have already been taken. But not everywhere and not fast enough. This is where we as European institutions can help getting the discussion started. Last Friday, the Commission adopted a Skills Agenda for Europe. The Skills Agenda focuses on horizontal skills and their importance for bringing people into good work. However, I am very glad that the initiative also makes the link with the Energy Union and the transition to a low-carbon economy.

Let me highlight a few of these links:

The Skills Agenda launches a Blueprint for Sectoral Cooperation on Skills. This is an initiative to better match skills within specific sectors. It will help mobilise and coordinate key players of the economic sector, stimulate private investment and encourage a more strategic use of EU and national funding programmes. Six sectors have been chosen as pilot projects due to their maturity. Two are relevant for our topic today: the automotive sector and maritime technology which are both in the process of developing greener and more sustainable technologies. It is important to highlight that “maritime technology” includes off-shore wind energy and ocean energy. If these pilots are successful, the Blueprint can be expanded to other sectors with a strong focus on green growth and renewable energy.

Four have been particularly mentioned by the Commission:

1) The Renewables Sector – the reason is obvious I think.
2) The Construction Sector which is crucial for making our buildings more energy efficient, but also for delivering the infrastructure for more efficient technologies like district heating or modern transmission and distribution grids.
3) The steel sector which – as an energy intensive industry – needs to adjust to the long term decarbonisation goal through more energy efficiency and ultimately carbon capture and storage or use.
4) And fourth: Green technologies in general.

This offer needs now to be filled with life by the stakeholders and the Commission services. But beyond initiatives at EU level, it is important to have similar initiatives at national level.

Let me remind you in this regard that the Energy Union Strategy proposes National Energy and Climate Plans. They should be used by national governments to develop a strategy for managing the energy transition in their country. The link with jobs and skills is an important aspect in this regard. Let me conclude the part on skills with an example that Commissioner Cretu shared with me recently. The Commission had a programme to support energy efficiency measures in a given Member State. The programme was well inteneded, but it failed because there were simply not enough skilled workers to install the new technologies. So, in the end, the programme had to be transformed to support the build-up of skills first.

This leads me to the role EU Funds can play to support the energy transition. EU Cohesion Policy makes a key contribution for delivering the Energy Union objectives on the ground. This includes significant financial allocations from the European Regional Development Fund (ERDF) and the Cohesion Fund, totalling EUR 69 billion over 2014-2020 for investments related to all five dimensions of the Energy Union. But Cohesion policy is not only about funding. It provides a policy framework for integrated territorial development, and as such it is particularly well suited to address issues linked to the energy and low-carbon transition. Cohesion policy provides Member States with administrative capacity building and technical assistance, so that investments actually contribute to a real and lasting energy transition. For example, since last year we offer support for short-term exchanges of know-how among government staff directly involved in managing cohesion policy energy projects. The European Regional Development Fund is also investing in education infrastructure and is complementary in this regard to investments from the European Social Fund. At least EUR 1.1 billion from the ESF will be dedicated to improving education and training systems necessary for the adaptation of skills and for the creation of new jobs in sectors related to energy and the environment.

The European Regional Development Fund is also supporting cooperation between industry, business and researchers in the context of Smart Specialisation Strategies. A large number of Member States and regions have prioritised support to research and innovation in sustainable energy and low-carbon in their strategies. We have launched a specific Smart Specialisation Platform on Energy, to make sure that they have access to the latest knowledge. In all these ways, cohesion policy helps regions to anticipate and manage the consequences of the energy transition. This is crucial for all regions, but in particular those which depend strongly on traditional fossil fuels.

But we must also use the potential of EFSI or the Juncker Fund: We have a first great project example in Nord-Pas-de-Calais which shows how to combine ESI Funds and private investment with EFSI support. The project aims to develop a low-carbon economy in the region and intends to make the Region a “zero-emissions” energy model by 2050, while at the same time creating employment, developing the overall economy and combating fuel poverty.

Let me conclude my introductory remarks with two more aspects which we can hopefully discuss more in depth during our debate.

First: the role of social dialogue. In 2015, I have personally held two meetings with the EU cross-sectoral Social Partners to discuss the Energy Union. These were two very useful meetings; and I intend to continue this practice. But it is important to complement these high level dialogues with sectoral initiatives. I hope that the Blueprint that I mentioned before will encourage the Social Partners in the sectors to look into the issue.

And finally: energy poverty. We have had a debate about the topic in the Plenary two weeks ago. This underlines the importance of the issue. We will carefully analyse the proposals of the European Parliament and I hope that we will respond positively to a great number of them, notably in the field of energy efficiency.

This was my attempt of a quick overview of the social and economic challenges of the Energy Union. Now, I am looking forward to our debate.

Thank you very much for your attention.

Courtesy of the European Commission