The emerging regional 'powers' - EU monitor

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The emerging regional 'powers'

Source: M. (Maroš) Sefčovič i, published on Friday, September 30 2016.

We often talk about the energy transition in terms of its sources; from traditional fossil fuels to low-carbon and renewables. But another dramatic change is happening before our eyes in Europe's energy landscape. Sometimes it is intuitive and in other cases requires a political push to materialise: We are witnessing the emergence of blocs of countries whose energy infrastructure and legislation is more and more harmonised.

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There are many examples, such as the ambitious grouping of Germany with its 11 neighbours, known as the Baake Declaration or even the 'mini Energy Union'. Another inspiring example comes from the potential of wind energy in the North Sea, with the recent political declaration, signed in June between nine countries (Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and Sweden). Realising that the sea between them is in fact a huge source of renewable energy, these countries decided to roll up their sleeves, collectively.

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Or across the Baltics, which were almost entirely isolated from the rest of Europe's energy market, and are now making their 'historic comeback'. The construction of the liquefied natural gas (LNG) terminal, in the Lithuanian port city of Klaipėda, turned it into a regional hub for gas trade. And the recent electricity connection between Lithuania and Poland (through LitPol Link) and to Sweden (through NordBalt) ended the isolation of the region. They were made possible thanks to the Baltic Energy Market Integration Plan initiative, or the so-called BEMIP.

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Finally, the High Level Group on Central and South Eastern Europe Gas Connectivity, better known as CESEC, was established last year in order to facilitate cross border gas infrastructure projects across its 15 (!!) members, both within the European Union and in our eastern neighbourhood. But given the very fast track of accomplishments (one which even we wouldn't have anticipated), the group convened in Budapest earlier this month and announced the expansion of its close collaboration into other energy fields, namely: electricity, energy efficiency, and renewables.

'Power couples'

In some cases, the initiative to better integrate across borders is not even at national level but starts at the local level of neighbouring districts in separate countries. Germany's Lower Saxony and Northern Netherlands are a perfect example to such wind of change: Off-shore wind energy from the North Sea currently supplies electricity to consumers on both sides of the border. The two regions maintain solid cooperation across political, academic, and entrepreneurial levels, ensuring synergies don't stop at the border.

/commission/file/my-visit-lower-saxony-and-northern-netherlands-100-seconds_enMy visit to Lower Saxony and Northern Netherlands in 100 seconds

Video of My visit to Lower Saxony and Northern Netherlands in 100 seconds

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Or last year's electricity connection of Spanish municipality of Santa Llogaia with the French commune of Baixàs. This new connection served not only the two localities but in fact doubled the interconnection capacity between France and Spain (from 1400 megawatt to 2800 megawatt), therefore better connecting the entire Iberian Peninsula to rest of Europe. It therefore enjoyed EU support of 255 million.

Here again, cooperation does not need to stop at the EU borders; Norway and Sweden have put together a joint support scheme for renewables which has proven highly successful.

This kind of energy cooperation is exemplary and constitutes a crucial step towards a single European energy market. That is why we need to ensure energy also crosses other European borders, all European borders.

From a 'Singles Market' to a Single Market

It doesn't take an energy genius to understand the tremendous complexity of such transition. But Rome wasn't built in a day, and neither will the Energy Union. Energy infrastructure was laid a century ago in major cities, which were gradually connected to each other until national grids and pipelines were complete. Connecting countries across entire regions is therefore a critical step towards a fully connected continent.

We, in the Commission are helping to make this the new reality (below, above and) on the ground. Very important milestones in this regard are our upcoming legislative proposals on the new market design of Europe's electricity market, on renewables, and on Energy Union governance. These three will also push for further cross-border regionalisation of the energy markets.

Just imagine what our internal market could look like when EU countries do not have to constantly worry about their energy security. Imagine they could instead rely on their neighbours, who could also rely on theirs. This way, when demand is high on one side of the continent, instead of producing more energy, we would simply re-direct energy from anywhere where supply is high. The abolishment of national reasoning, when it comes to energy, would also save billions of tax-payers' euros, spent on redundant infrastructure for energy production (or what we call 'capacity mechanisms').

In fact, an appropriately inter-connected single market could save European consumers up to €40 billion a year!

Now stop imagining. Let's do it.

Originally published on VP Šefčovič’s LinkedIn account