Remarks by Commissioner Simson at the press conference following the Energy Council

Commissioner Simson following the Energy Council

Good evening, everyone,

After thorough negotiations, and with the skillful handling of Teresa and the Spanish Presidency team, the Council found an agreement to move ahead with the Electricity Market proposal.

It will help increase the resilience of the European electricity market to any future price shocks coming from tensions on gas markets but also to prepare for a decarbonised future.

The reform will bring certainty and predictability for the electricity sector to trigger necessary investments in clean energy infrastructure. This, consequently, will result in faster and broader benefits of the transition to our economy and society at large.

It opens a greater space for green, non-fossil flexibility technologies needed for a market where variable renewables will be predominant.

It facilitates investment in grid expansion by changing the tariffication methodology. It supports PPAs and long-term instruments. It enhances consumer protection and expands options for energy communities.

Today's General Approach preserves the overall direction of the reform as proposed by the Commission in March, and importantly, it works for all our 27 Member States.

The main remaining issue for today's negotiations concerned contracts for difference and their application to investments in existing assets. While it is a very technical point, there were genuine concerns for its competitiveness implications and the risks for a level playing field among Member States.

I can say that the Council found a balanced agreement on this point, which preserves the essence of our proposal that new investments should be made using the tool of CfDs. Simply put, for Member States' direct price support to lifetime extension investments, the use of CFDs is not a mandatory solution, but remains still a possibility and will be subject to state aid rules.

To the extent that two-way CFDs are used to trigger such investments, the Commission will of course ensure that such instruments are properly designed, and do not give rise to undue distortions of competition and the level playing field in the internal market. The same remains True in relation to any other type of Member State intervention affecting the electricity sector.

Today's agreement builds on work that started under the Swedish Presidency, and intense consultations have taken place since the June Council.

I want to once again congratulate the Spanish Presidency and you, Teresa, for your hard work and your search for a balanced compromise over the past months.

I hope that the negotiations with the European Parliament can now proceed without any delay. Now we really have a chance for a final agreement with the co-legislators.

A short comment also on our Winter Preparedness.

As the heating season is starting now across the EU, our energy security situation has significantly improved compared to last year. We have diversified our energy sources, filled our gas storage at 97% and reduced energy demand. And we keep increasing the share of renewable energy sources in our energy mix. 

We have been faced with an increasingly uncertain global environment. Global gas markets remain tight and we must remain vigilant for further cuts of Russian pipeline gas, a very cold winter or further disruptions of our critical energy infrastructure.

The Commission is closely monitoring oil markets, although we are in a better situation as regards oil supplies in the Union than last year. This is mainly because the Member States have refilled their emergency oil stocks in line with our last year's Recommendation.

Today, Finland and Estonia have also informed us about the impact of the recent incident at the Baltic Interconnector and we discussed how best to ensure protection of the critical energy infrastructure. We will wait until the ongoing investigation is closed to draw conclusions. But I did stress the following to the ministers today: If gas security of supply of the region is not affected, it is because we have done our homework since Russia's attempt to weaponise energy.

We also had the opportunity to have Ukraine's Energy Minister German Galushchenko with us, and I expressed once again the Commission unwavering support for Ukraine, ahead of another very difficult winter for Ukrainians.

The Commission has already earmarked over 50 million euros to the Ukraine Energy Support Fund and I encouraged the Member States to continue their donations, too. 

We will do our utmost to ensure that also this winter the effects of any Russian attacks targeting Ukraine's energy and civilian infrastructure will be minimised.

Ladies and Gentlemen,

We also discussed the National Energy and Climate Plans, which are our main tool to ensure that our headline targets become tangible policies in Member States.

Three years from the presentation of the first Plans a lot of things have changed. We have new targets agreed on RES and energy efficiency, and Member States were asked to present draft revised plans by July this year and now we really need all plans so that we can have the new final updated plans by June next year.

We are still waiting for too many capitals to send their draft plans. This is why it is extremely important that all EU countries that have not done so submit these documents to the Commission without delay.

Overall, a fruitful and intense meeting which shows once again our ability to move forward in unity and to be prepared for whatever will come. This was, overall, a very successful Energy Council, once again.