Mr. Piebalgs in 2007 together with your fellow Commissioner Mr. Potočnik, you created the SET Plan initiative putting thus energy technology innovation also at centre stage of energy policy for meeting the 2020 energy and climate targets, and the 2050 vision for a low carbon economy. Why did you feel this was necessary from an energy policy perspective? What were your expectations from the SET Plan?
Energy research was a high level priority for me from the start of my mandate as Energy Commissioner. I was convinced that Europe was vulnerable from the security of supply point of view. With decreasing domestic fossil fuel reserves, we became more exposed to the supply of a few key producers. As a response to the oil supply shocks of the 1970s and 80s, the EU developed the strategic oil reserves mechanism, but it was clear that existing gas storage capacity and infrastructure was not sufficient to deal with a crisis. In fact, during the oil crisis there was a popular saying - “We don’t have oil but we have ideas”. In addition to all the measures to restrict demand, there have been substantial investments in energy research. Unfortunately, with the abundance of cheap oil and the creation of oil stocks, interest in energy research has decreased substantially. Also, existing utilities who held a quasi-monopoly had very limited interest in research investment. The objective to fight climate change and substantially decrease greenhouse gas emissions from the energy sector gave a new and more shared understanding across the European Union that Europe needs to invest in research to develop zero carbon technologies. Europe should lead the world in new energy technologies for increasing the security of supply in a sustainable manner. Development of competitive renewable electricity systems, sustainable second generation biofuels, energy storage, energy-efficient appliances and climate-friendly vehicles have become frontiers of research. The strength and weakness of publicly funded European research is that the funds are decentralised, which means the researchers themselves have a substantial impact on research priorities. Limited competition in the European energy market didn’t promise a substantial investment of private funds. This showed a clear need for strategic European research planning while maintaining decentralised research funding. Hence the creation of the SET Plan. We needed concrete results, mobilising all stakeholders. Strategic guidance was to be accompanied by more effective implementation of the results of successful research through Industrial Initiatives. There were expectations that this strategic approach could increase funding. An ambition to be the best was accompanied by a willingness to share knowledge with other nations of the world with an openness to the pooling of funds for achieving faster technological breakthroughs. There has been a lot of debate about how to measure the results of the SET Plan. We finally came to the conclusion that the results will reflect the level of success of implementation of the 20-20-20 by 2020 strategy. It was clear that Europe could only achieve the goals of this strategy with substantially accelerated efforts in energy research.
This year marks the 10th anniversary of the SET Plan. Looking back, can you share with us your opinion on the progress made by the SET Plan?
I believe that on the 10th anniversary of the SET Plan, the best way to analyse progress made is to reflect on changes in the energy sector. The EU is well on track to keeping its commitment to decrease greenhouse gas emissions by 20% by 2020. Investments in renewables such as solar and onshore wind energy are cost competitive and represent a substantial proportion of investment in power generation. In addition to this, there have been substantial developments in offshore wind generation. European electricity systems manage to integrate huge renewable energy flows. There are days when in some parts of Europe, all households and industries are powered exclusively by renewable energy sources. These investments have created hundreds of thousands of new, high quality jobs in Europe. Furthermore, renewable energy is the fastest growing energy sector internationally. At the same time we should recognise that a lot still needs to be done. In 2016, the EU showed only a slight decrease in greenhouse gas emissions as compared with 2015. The current policies are clearly not sufficient to achieve the 2030 goals, let alone the 2050 goals. Changes in the building sector have been slow while emissions from the transport sector have actually increased. The EU needs to beef up its climate policies and support instruments, including the SET Plan. Still, I see fundamental changes in research in the energy sector. I am happy about European Investment Bank activities that provide financing to public and private energy research projects. Recent examples include a support of nearly one billion Euro for strategic investments in energy and science in Poland, and a €110 million loan to SENER, a Spanish company designing cutting-edge services for the renewable energy sector. I was happy to learn about Europe’s most advanced and largest lithium-ion battery factory in Sweden that will start to supply European customers in 2020. The UK is launching a fund to boost the development and manufacture of electric batteries. Germany has opened two new hydrogen refuelling stations, which have the capacity to serve 40 fuel cell vehicles every day. And I could continue with similar stories. That means that the SET Plan has managed to achieve the most important objective - to turn attention to energy research and practical solutions in achieving a low carbon economy in the EU and globally.
Based on your long lasting engagement with the European policy affairs, what is your view on the commitment of the SET Plan countries for the implementation of a joint research and innovation agenda, as foreseen in the Energy Union? To your view, what is the next major challenge that the SET Plan should address to help the European Union meet its energy and climate goals?
Each EU country has its own ambitious national climate and energy targets. Each country tries to increase its competitiveness and create new, high quality jobs. And that is understandable. Still, we need to take into account the global shift in interest towards investing in green technologies. China, US, India, Russia and even Saudi Arabia would like to be leaders in these new technologies. And the role of research and development in the green transition is crucial. A certain critical mass is needed to get the intended results; there is an increased need in Europe for coordinated focus on specific areas to optimise research through synergies. The SET Plan tries to do it at a European scale, but there is clearly a limit to what is achievable on such a large scale. It seems that European experience in regional cooperation could deliver fresh impetus. This strategy was and is used successfully for integrating Europe’s electricity and gas markets. Good examples come from Nordic countries, where there is serious debate on strengthening Nordic energy research and developing a regional agenda. Among the proposals discussed are common visions for cooperation in energy research, regional research and demonstration programmes, and common PhD programmes in energy and green export strategies. I believe that the Nordic experience could be replicated in other parts of Europe. To give it more coherence it would be good if this regional cooperation could compliment the SET Plan.
I strongly believe that the European Commission was right to make energy research and innovation one of the five pillars of the Energy Union. Today this pillar is perhaps less visible, but seeing global commitment in moving towards a low carbon economy, we can anticipate its growing importance. And the SET Plan is a proven tool that served and continues to serve us well in strengthening this pillar.
Former Commissioner responsible for energy and for development
Andris Piebalgs is an experienced Latvian politician and diplomat, who has occupied key positions in both national and European levels. He is the leader of the Unity party. He has been Latvia’s minister of Finance and of Education. He served also as a chairman of the Budget and Finance Committee of the Parliament. He was the Latvian Ambassador to the EU. He served as a European Commissioner for Energy from 2004 to 2010 and as a European Commissioner for Development from 2010 to 2014. He is a Senior Fellow at the Florence School of Regulation and the Chairman of the Board of Appeal of the Agency for the Cooperation of Energy Regulators.