Letter to Energy Ministers: sustainable financing and new governance

Climate action| Global transition

CAN Europe sent the following letter to Energy Ministers ahead of the Informal Energy Council on 12-13 July 2016

Dear Energy Minister,

During the upcoming informal Energy Council on 12-13 July in Bratislava, a joint session with the EU environment ministers will be devoted to ‘sustainable financing and new governance’. We would like herewith to share some views regarding this important element, not only in meeting the agreed targets, but also in supporting the core conditions for an orderly transition – namely: strong investor confidence in the policy and regulatory regime, energy solidarity and trust, and public support.

In particular, we would like to highlight three key messages regarding the discussions on the National Energy and Climate Plans (NECPs) currently taking place between the technical working group of national energy and climate experts, and the European Commission:

  1. While the current planning and reporting system can be improved and there is some room for streamlining, it is unrealistic to expect one single plan to cover everything, including all the international reporting obligations in the EU. A single high level plan and report replacing all existing planning and reporting obligations would imply a significant loss of detailed information, thereby weakening monitoring and accountability, and increasing the challenge of delivering of the 2030 targets and achieving the broader Energy Union objectives.
  1. To ensure accountability, transparency and legitimacy, the development of national plans, as well as the reporting, need to be anchored in a legislative framework.  This legal framework should include binding templates detailing data requirements and ensure the meaningful participation of stakeholders in the plan-making process.
  1. National plans have to include a long-term perspective (up to 2050) as to put in place the “enabling conditions” that allow for deeper structural changes in the economy and energy system that are needed to reach ambitious overarching climate objectives, in line with the goals of the Paris Agreement. A long-term perspective is vital to ensure that measures implemented to achieve the 2020 and 2030 targets increase the likelihood of delivering the 2050 goals. It is crucial to ensure that system elements with an extended life span, particularly electricity transmission and distribution infrastructure, are appropriately designed to allow increasing volumes of (variable) renewable energy in the system.

On sustainable financing, we believe that both the Modernization Fund and the Innovation Fund can play a crucial role in helping European governments, businesses and citizens to make a just transition to a zero carbon society. The ETS Directive must therefore specify project eligibility criteria with an exclusive focus on energy savings and renewable energy. It must furthermore state that to be eligible for funding Member States must ensure full transposition of all relevant EU legislation. For the Innovation Fund the Directive must establish an absolute cap of € 300 million that can be awarded to one project. The Modernisation Fund should build on existing experience with the cooperation between the European Commission and the European Investment Bank, and draw on features of the European Fund for Strategic Investments and the existing Cohesion Policy implementation including the role of national and regional managing authorities. On top of these two Funds, the ETS Directive should also include a fund to finance international climate action and a Just Transition Fund to support local communities and workers in regions impacted most strongly by the ongoing transition to a decarbonised economy.

We hope these thoughts are useful for your discussion.

Yours sincerely,                                        

Wendel Trio, Director CAN Europe