2.2.2017   

EN

Official Journal of the European Union

C 34/78

1.1.

The EESC supports the basic idea of a new electricity market design. This is necessary in order to ensure a stable electricity supply system that contributes to the objectives of the European Energy Union. The medium to long-term transition of electricity production and marketing towards decentralised structures and the implementation of the targets set out in the EU Renewable Energy Directive require a completely new electricity market design. The EESC points in this connection to its opinions TEN/577, TEN/578 and TEN/583, in which it addresses this issue as well as the future role of consumers, prosumers and new market participants.

1.2.

In the EESC’s view, ‘smart’ distribution grids together with ‘smart meters’ and storage technologies will also form a significant part of the new electricity market design in the medium and long term. These ‘smart’ grids and control and storage technologies can therefore produce positive effects both in terms of optimising electricity consumption and saving electricity.

1.3.

The EESC draws attention to the potential of small producer/consumers (‘prosumers’), but also of other new models such as energy cooperatives; the latter can help reduce energy poverty. In order to integrate these prosumers fully into the energy market, the Committee considers it essential, among other things, to remove administrative barriers and any other unnecessary obstacles that may hinder their activities, and to ensure they have access to distribution networks on the basis of the prevailing market conditions with regard to financing the operation of these networks.

1.4.

The EESC feels that the use of smart controls in ‘smart’ households is also an important element of the new electricity market design. Their use will lead to an increase in the active role of households as part of their full integration into the new electricity market design and to reduced risks of energy poverty. These notable changes will be facilitated by incentivising training programmes aimed at large sections of the population, as well as by supporting their implementation among vulnerable households and other vulnerable customers in the energy market, such as small and medium-sized enterprises.

1.5.

The EESC is satisfied that all the anticipated changes in the new electricity market design are subject to the condition that the new market will provide the right short-term price incentives (price) and long-term price signals (cost) enabling and supporting extensive investment activity in the EU electricity sector. This also means that prices must reflect the full true cost, i.e. that ‘external’ costs are also factored in.

1.6.

Developments on electricity markets in recent years have led to a considerable fall in wholesale market prices; however, small consumers and SMEs have not seen the benefit of this yet, their prices having gone up rather than down.

1.7.

Through a smart electricity market design, together with strategic investments in systems that also specifically include socially less advantaged citizens, e.g. in the form of energy cooperatives, it will in future be possible to combine energy policy, social policy and regional value creation.

1.8.

Policy must also provide a clear answer to the question of who should, may and/or can produce electricity as part of future decentralised production. This is also crucial for solving the problem of energy poverty.

1.9.

An example of this is the Polish Podlaskie Voivodeship, where a funding scheme for small PV systems is currently being launched. Thanks to an investment grant of 60 % along with the plan to introduce a net metering system in Poland, energy costs for the country’s consumers can be halved.

2.1.

In a letter dated 14 March 2016 the Slovak Presidency of the EU Council asked the European Economic and Social Committee to draw up an opinion on the social dimension of the new electricity market design as part of a process of social and economic development.

2.2.

The Slovak Presidency notes in its request that the new electricity market design brings opportunities for consumers if it offers a more proactive way for them to interact with the market. Nevertheless, possible threats to socially vulnerable consumers must also be taken into account, alongside the anticipated impact of the possible increased electricity prices on the competitiveness of EU industry.

2.3.

The EESC has examined the expected development of the energy market in detail in a number of its previous opinions (1), (2) and considers that the conclusions and recommendations that it has adopted are still relevant. The present opinion therefore focuses on the risks and opportunities for socially vulnerable groups associated with the new electricity market design and on the specific manifestations of energy poverty that are related to the availability of electricity.

3.1.

The main task of the new electricity market design, which is based on principles of sustainability, must be to ensure a secure supply of electricity for all consumers at affordable and competitive prices.

3.2.

The EU Energy Union framework strategy is focused on the following key strategic objectives:

3.3.

The main features of the framework strategy for the electricity market are:

3.4.

The changing role of consumers in the energy market should play a significant role in the new electricity market design (3).

4.1.

In the recent past the EESC has adopted a series of opinions on the issue of energy poverty, in particular opinion TEN/516 — ‘For coordinated European measures to prevent and combat energy poverty’ (rapporteur: Mr Coulon, 2013) (4), which was examined closely at national level, for example by the Economic and Social Council of Bulgaria in its opinion ‘Measures to overcome energy poverty in Bulgaria’ (ESC/3/030/2015). The EESC considers that the recommendations and conclusions of these documents are still relevant and does not intend to reiterate them here.

4.2.

The issue of energy poverty is also addressed in opinions TEN/578 on ‘Delivering a New Deal for Energy Consumers’ and TEN/583 on ‘Prosumer Energy and Prosumer Power Cooperatives: Opportunities and challenges in the EU countries’.

4.3.

Energy poverty is characterised by limited access to energy sources due to absent or badly functioning energy infrastructure or an inability to pay for the provision of energy commodities. In cases where there is a risk of non-functioning infrastructure, capacity needs to be increased or new capacity created in order to ensure the security and reliability of energy supply. Even network operators are realising that decentralised generating units, such as PV systems in private homes, can help to stabilise regional supply and often also weak regional networks.

4.4.

Even if energy poverty is often looked at from the point of view of private end-users, it is important to note that some small and medium-sized enterprises are also often exposed, with all the ensuing consequences for their competitiveness.

4.5.

Energy poverty is most often related to the ability to heat homes; however, in southern EU countries it can also refer to the availability of air conditioning in hot summer months. Energy poverty is expressed specifically in the inability to pay electricity bills. In such cases, approaches are used that are based on direct or indirect support for consumers faced with energy poverty.

4.6.

Direct support to consumers is provided primarily in the form of social benefit programmes, such as direct compensation of payment in monetary or non-monetary forms, and based on the national social security system at Member State level.

4.7.

Vulnerable consumers are defined differently in individual Member States according to the specific situation and relevant social system in each Member State.

4.8.

Indirect support is provided via social or special tariffs. Social tariffs are currently provided in 10 Member States; eight Member States have defined the status of vulnerable customers; and a total of 16 apply regulated electricity prices to their own internal markets. The EESC has expressed its clear opposition to this kind of regulated prices (see TEN 578)

4.9.

However, it will be possible to limit the risks of energy poverty by adopting a series of measures that are compatible with the new electricity market design. This will include the following elements in particular:

4.10.

Developments on electricity markets in recent years have led to a considerable fall in wholesale market prices; however, small consumers and SMEs have not seen the benefit of this yet, their prices having gone up rather than down.

4.11.

The EESC points out that small producer/consumers (‘prosumers’) can also play a distinct role in reducing energy poverty. In order for them to be integrated successfully into energy markets, it is therefore essential to remove all administrative barriers as quickly as possible and enable them to access networks while at the same time safeguarding market conditions and complying with quality standards for electricity supplies.

4.12.

The EESC believes that even if the above suggestions are implemented in accordance with market regulations, most of the burden of fighting energy poverty and its consequences will continue to be shouldered by social systems within individual Member States, since these constitute the only suitable alternative from the point of view of the market.

4.13.

Through a smart electricity market design, together with strategic investments in systems that also specifically include socially less advantaged citizens, e.g. in the form of energy cooperatives, it will in future be possible to combine energy policy, social policy and regional value creation.

4.14.

Policy must also provide a clear answer to the question of who should, may and/or can produce electricity as part of future decentralised production This is also crucial for solving the problem of energy poverty.

4.15.

Renewable energies open up completely new possibilities for tackling energy poverty as a social problem. For example, a study of the European Commission’s Joint Research Institute concluded as early as 2014 that 80 % of Europe’s population could potentially produce their electricity — using PV systems — more cheaply than the cost of drawing it from the grid. One problem is that a section of the population does not have a rooftop or land to accommodate this kind of installation. Expanding the definition of the term ‘prosumer’ and supporting communal installations (energy cooperatives) could provide a remedy here.

4.16.

In a study recently published by CE Delft it is estimated that by 2050 up to 83 % of households will be able to produce enough electricity themselves to meet their needs.

4.17.

However, a significant problem is the fact that socially less advantaged citizens in particular do not have the money to make the necessary investments. The ‘disadvantage’ of renewable energies is that they require a relatively large initial investment, although the running costs are very low (it goes without saying that the sun and wind are free). Nevertheless, this problem can also be tackled through policy, including by making the relevant strategic investments.

4.18.

An example of this is the Polish Podlaskie Voivodeship, where a funding scheme for small PV systems is currently being launched. Thanks to an investment grant of 60 % along with the plan to introduce a net metering system in Poland, energy costs for the country’s consumers can be halved.

4.19.

In this connection, the Committee also urges the Commission, the Council and the EP to devote greater attention to medium- and longer-term developments that could be positive for consumers, such as the example of electro-mobility. The number of electric cars on the market is expected to increase over the next 20-30 years. An electric car needs approximately 14 kWh per 100 km, equal to EUR 3,50 at 0,25 cents/kWh. A 100 km journey in a car with a combustion engine — with a consumption of 7 l/100 km and at EUR 1,20/litre — costs EUR 8,40. A PV system with approximately six modules is sufficient to produce the amount of electricity required for an electric car to travel 10 000 km; with an investment of around EUR 3 000 it would be possible to power this kind of car (from own production) for 20 years. The financial aspects — both for the public and also potentially for the regions — of the transition to electro-mobility have not been sufficiently discussed to date.