Ljubljana, 7 July 2021
ENERGY IN SLOVENIA: Slovenian Presidency of the Council of the EU 2021
On 1 July Slovenia took over the presidency of the Council of the European Union. At the webinar on Wednesday, 7 July, organized by the Energy Industry Chamber of Slovenia (EICS) – Energetska zbornica Slovenije (EZS) as an umbrella organisation of the energy sector in Slovenia, the attendees from around the world learnt all about the:
Focus on sustainability, climate neutrality, energy transition and circular economy
A six-month programme of the Slovenian presidency is based on an 18-month programme of the Trio Presidency of Germany, Portugal and Slovenia, which was adopted in June 2020. The priorities of the Slovenian Presidency entail a strong agenda in the field of energy and environment, especially due to the fact that one of the largest legislative reviews will be proposed by the Commission in July in the light of the new ambitious 2030 goals – 55% reduction of greenhouse gas emissions.
The State Secretary at the Ministry of Infrastructure, Mr Blaž Košorok, said: “General priorities of the Slovenian Presidency will focus on sustainability, climate neutrality, energy transition and circular economy. At the same time, the focus will remain on the recovery after te pandemic crisis. As for the more detailed look into the files in the field of energy, our efforts will go into trialogue negotiations on the TEN-E Regulation and start of a discussion on long-awaited Fit for 55 package.” The goal of the Slovenian Presidency in this field is to present a progress report on the negotiations in December 2021 and submit the dossier to the French Presidency, starting 1 January 2022.
ACER experienced a warm welcome in Ljubljana, Slovenia
Christian Zinglersen, the director of the Agency for the Cooperation of Energy Regulators – ACER, which set up office in Ljubljana 10 years ago, said that the Agency has experienced a warm welcome and developed a strong partnership with its host country. “We are proud as an EU Agency to contribute strongly to key EU priorities, be it from our long-standing work on integrating Europe’s energy markets (critical to achieving broader decarbonisation efforts at lower cost) to more recent tasks enhancing the cyber security resilience of Europe’s power sector,” said Zinglersen, adding: “As Slovenia takes over the EU Council Presidency at such an exciting time, ACER stands ready to continue our support and expertise when and where we are called upon.”
Fit for 55 Package an enormous opportunity for all Europeans
“With the Fit for 55 legislative package the European Commission has set the tracks for the most ambitious, all-encompassing transition for Europe’s economy over the next decade and beyond,” said Kristian Ruby, Secretary General of Eurelectric. “The power sector sees the Green Deal as a social, industrial and strategic opportunity for all Europeans. We endorse this acceleration, while working hard to deliver a sustainable and cost-effective energy transition across EU Member States,” added Ruby. In his view, the electrification must be made the red thread through the package for decarbonising the economy. “Electricity will shape new cross-industry ecosystems to deliver the energy transition for transport, heating and industrial uses.”
Therefore, the Fit for 55 package needs to:
- Prioritise direct and indirect electrification to drive decarbonisation and streamline policies to electrify end-use sectors.
- Reduce taxes and levies on electricity, thus establishing a level playing field with other energy carriers and empowering customers to drive the change to net zero.
- Modernise the power system to enable flexibility from electrified sectors.
- Reinforce infrastructure: improve permitting procedures for new electricity capacities; ensure buildings have recharging infrastructure; unlock investments in distribution grids.
Ruby acknowledged that Slovenia is affected by long permitting procedures. “Ambition requires permission. A radical change to the policy framework on permitting processes and the resources allocated to it by the relevant authorities is required.” Moreover, the accelerated permitting for climate critical infrastructure is needed. Last but not least, there is a need for a coordinated spatial planning and permitting processes for electricity generation sites, grids and the related project infrastructure, in combination with determined “renewable energy sources (RES) priority zones” to guarantee a “fast track” in terms of grid connection.
Predictable, long-term, stable, transparent and market-based frameworks are needed to ensure the necessary investments in renewables, carbon neutral energy sources and key transition enabling technologies such as storage, Power-to-X and demand side flexibility, while addressing the security of supply challenge, says Eurelectric.
ebIX and the open international standards
The European forum for energy Business Information eXchange, ebIX, provides standardised and harmonised processes for the liberalised downstream electricity and gas markets with the focus on information exchange, following EU rules and allowing national customisation. Vlatka Cordes, Chair of ebIX, stressed the importance of open international standards in a communication process that involves millions of decentralised market participants. The data exchange is always a delicate process. “The energy transition leads to an even closer, faster exchange of data amongst producers, consumers, prosumers, energy storage providers and System Operators (DSO’s, TSO’s) which will be connected to each other through information exchange. Hence interoperability for data driven business processes is crucial,” explained Cordes.
More energy to deliver better lives, a healthy planet and leave no one behind
Dr. Angela Wilkinson, Secretary General of World Energy Council (WEC) welcomed the Slovenian Presidency agenda with its emphasis on green, digital and resilient: “It is timely in a pivotal moment for the whole world and well-aligned with our community-wide imperative of humanising energy.” She said that the world will require more energy to deliver better lives, a healthy planet and leave no one behind.
Better energy solutions are not green, blue or any other colour and net zero or carbon positive solutions are needed to meet the needs of the many, not only the wealthy few. Dr. Wilkinson says that there is an increasing diversity in energy interests, situations, experiences, perspectives. “It’s a reality that is easily overlooked in the growing risk of extreme polarisation of energy good vs. bad, green vs. clean.” The new pattern of demand-side disruptive innovation is often confused as the push of cheaper renewable power, including electricity, technologies and the fall in price of solar and wind power. It involves, however, the pull of people and policies – and directs leadership attention to balancing energy security, affordability and equity, and environmental sustainability.
“The COVID-19 crisis has been a brutal shock to all societies. Recovery is not proving to be easy – even with a vaccine. The gaps between energy haves and have nots have grown wider in this crisis and this pattern is evident in all regions and countries. The new pandemic context of affordability and social justice means that the future of energy is going to be even more demanding – quite literally!” warned Dr. Wilkinson, adding that we should expect some permanent destruction of energy demand in some places, “but we must also prepare for the return of global energy demand growth and anticipate new energy uses and users”. Because energy is a bigger story than emissions, a vision-based roadmap of a better energy future is not enough – it needs to be cocreated, concluded the Secretary General of WEC.
Behavioural bias that favours adaptation over mitigation in fighting climate change
James L. Smith, President of the International Association for Energy Economics (IAEE), said: “The idea of personal fight against climate change brings to my mind an important distinction between efforts to mitigate climate change through reduced emissions as opposed to adapting to those effects of climate change that we are not able to prevent.” The attempt to reduce emissions requires many technological initiatives, but the technical path to success does exist, as documented in the recent IEA’s Net zero report. That would, according to Smith, entail some cost, but the cost is not the real impediment to a success. People are willing to pay for the insurance – they purchase insurance to protect their homes, their families, their possessions. Their investments to reduce emissions are just another example of a type of insurance the people really do desire. But as Smith pointed out: “The problem is about who will pay for this insurance. The difficulty comes from the free rider problem. I benefit whether it is you or I who reduces emissions and I prefer that it’s you. The solution will not come easily. Studies that hope to demonstrate the feasibility of achieving net zero must grapple not only with the technological developments that would facilitate the energy transition but also with the behavioural obstacles that threaten its success.”
In contrast, the free rider problem is not such an impediment to adaption to the effects of climate change. Adaption involves efforts that are mostly local. Actions that involve local expense, but they also produce local benefits. “As with other types of insurance, people are willing to pay to invest in measures that would primarily protect their families, homes, their communities against the effect of climate change. Likewise, communities, states and even nations are willing to invest in measures and programmes that would protect the welfare of their citizens,” explained Smith, adding that the prominent example comes from the Panama canal which recently initiated a USD 2 bn programme to manage and offset the reduction in rainfall in fresh water that is available and required to flow ships across the lake Gatun and through the canal. Thousands of similar examples of this type of adaptation could be named.
Smith concluded: “My point is that there is a behavioural bias that favours adaptation over mitigation when it comes to fighting climate change. Policy makers must take into account not only the technological requirements that could move us toward net zero, as in the IEA’s report, but also behavioural incentives that determine what measures individuals, communities and nations are willing to undertake. Projections and forecast that fail to account for behavioural balance towards adaptation are bound to be wrong.”
Slovenia and the challenge of green energy transformation
The EU and Slovenia are facing a dramatic industrial and technological transformation comparable perhaps only with the invention of the steam engine, said dr. Klemen Grošelj, Member of the European Parliament (Renew Europe). “Facing climate change within the energy sector will demand an unprecedented scope of investments in capital, human resources and knowledge. Slovenia as a small and open economy with its relatively high-energy cost-sensitive industrial production faces several major decisions. The first one is how society and the economy will adopt this transition, both as a necessity and as an opportunity for the introduction of new business models and investments.” According to Grošelj, we all need to accept this transition as part of a broader social, technological and economic transition for our common well-being. In particular, we need to make clear and sound decisions with regard to what our energy present and future will look like and what it will be based upon. “Resolving these dilemmas will build an important foundation for the country’s future national industrial and technological development. On the other hand, the failure to do so could have long-lasting implications for the nation, its economy and its well-being,” stressed Grošelj.
Construction projects can be extremely challenging and expensive
“At the EU level, especially after the arrival of the new European Commission, policy has shifted towards energy transition. In December 2019, EU Member States agreed on a new growth strategy that aims to transform the EU into a modern, competitive and green economy with net-zero greenhouse gas (GHG) emissions achieved by 2050. The same applies also for Slovenia. The country faces a binding renewable energy target and plans to increase the share of RES in its energy mix to 27% by 2030. However, in supporting this target, we should not forget that constructing new renewable energy sources results also in an encroachment on environment,” said Franc Bogovič, Member of the European Parliament (EPP).
He added that construction projects can be extremely challenging and expensive. There can be complications as regards spatial planning, the environmental regulation, there are also the demands from civil society. “We should not ignore the question about how much of the renewable energy can be actually produced in a certain area, taking into account natural constraints. We should support further development of RES, however, we only RES are not enough for our energy needs. For Slovenia, it is extremely important to further invest also in nuclear energy,” said Bogovič. In his view and especially because Slovenia is now relying on energy imports, the building of a second unit of the Krško nuclear power plant should start as soon as possible.
Common vision for an advanced low-carbon Slovenian society
Marjan Eberlinc, the president of the Energy Industry Chamber of Slovenia, EICS, said that the Chamber, by connecting the energy organisations, is creating a common vision for an advanced low-carbon Slovenian society. “They say green is the new black. But I wish that green option would have always been in fashion …,” said Eberlinc, adding: “We are living in a special moment. Climate change is happening before our eyes. Everyone needs to act! We can surely be proud of small individual actions, but we need structural changes as well.”
Priority actions are needed today, continued the EICS President. The EICS’s analysis revealed that the Slovenian energy companies are ready to invest in an array of projects in the area of renewables, energy efficiency, smart grids, lowering the emissions. “Not only did our analysis show that the energy companies are planning green investments worth 4 billion EUR in the financial framework 21-27. The analysis also clearly demonstrated that the Slovenian energy companies have prepared projects which are ready-to-go in 2021-22 – worth 1,25 billion EUR! The realisation of an array of ideas will bring us closer to the green future.”
Watch the VIDEO of the event here: https://youtu.be/hGMlAKsW7e4
The Energy Industry Chamber of Slovenia, EICS, is grateful to all the speakers and participants that contributed to a successful event ENERGY IN SLOVENIA: Slovenian Presidency of the Council of the EU 2021!