What will 2018 look like for the energy sector?

The energy agenda for 2018 will probably focus on the revision of the French Low-Carbon Strategy (SNCB) and the plurennial energy programming (PPE), but also the implementation of the “Green New Deal” and the ecological transition contracts (CTE) announced by Nicolas Hulot, Minister for the Ecological and Inclusive Transition. At the European level, the Clean Energy Package will be on the home stretch. UFE takes the opportunity to present the key subjects that will matter most for the electricity sector.

As the PPE is to be adopted in 2018, a certain number of workshops already took place at the end of 2017, to keep up with the intensive pace of the agenda. This programming is in everyone’s mind, especially as it will set targets in term of energy generation, such as renewable and nuclear energy. For the energy sector, the PPE will be a decisive moment of this 5-years mandate, and the result of many arbitrages on detailed questions about the implementation of the energy transition. Paired up with the simultaneous revision of the SNBC, the PPE will be the occasion to debate on the state of the French energy landscape, on the consumptions’ evolution and on the feeble reductions of the CO2 emissions, not in line with the aim of carbon neutrality in 2050.

The advantages of electricity to find a way to an ecological and inclusive transition

With the publication of its study “Electricity as a driver of inclusive and ecological transition” in December, UFE recalled that electricity gathers all the conditions to be a privileged energy vector for tomorrow’s world, thanks to its performances in term of climate, trade surplus and job creation. At the same time, the electricity sector is vulnerable, as net job creations promised by the energy transition are not all specifically in the electricity sector but are rather distributed across a wide variety of economic sectors in France. The expected context in the coming years will be a transformation, at least constant, of jobs in the sector, with major challenges in term of accompanying concerned employees and employment areas. Enabling the implementation of this reconversion, in particular in regions with nuclear and coal production assets, is specifically one of the challenges of the ecological transition contracts (CTE).
UFE will build upon those lessons and ask that the PPE elaboration takes carefully into account social and economic dimensions of the energy transition, ahead of the choices to be made and not at the end of the process.

Beyond the stated objectives, what sectorial adaptations?

Without waiting for the conclusions on the PPE, the Minister for the Ecological and Inclusive Transition, Nicolas Hulot already declared the implementation of a Green New Deal in 2018, without much detail about such proposal. Are we talking about a global denomination to encompass all the sectorial initiatives, expected in 2018 but with preparatory work that started already in 2017? There is thus the future Transportation Law, preceded by the Mobility Forum – “Assises de la Mobilité” – and the initiatives in the building sector with the publication by the government of the Renovation Strategy. Moreover, in the renewable energy sector, the upcoming announcement of decisions to simplify procedures for wind energy should be repeated for the solar and methane sectors. But does this Green New Deal encompass new parts, additional administrative and financial means for the energy transition? Will it take into account the evolving role of networks? UFE wishes especially that reflections on the evolution of the energy taxation system continue, beyond what was done in 2017 with the increase of the carbon tax. Moreover, UFE hopes that an in-depth evaluation will be conducted to assess the effectiveness of some energy efficiency policies, especially in regard of the irregularities noted with the Energy Efficiency Certificates (CEE).

Last home stretch for the Clean Energy Package

At least, at the European level, the energy ministers adopted in December, at the very last moment, the Council general orientation on four key files of the Clean Energy Package. It is now up to the European Parliament to vote on its positions. The ITRE Committee is still in the process of negotiation of the Market Design legislative files, in particular on the question of capacity mechanisms. In a joint declaration, co-signed by seven national associations (Belgium, Germany, Ireland, Italy, Portugal, Spain and United Kingdom), UFE calls on MEPs to allow for a swift implementation of those mechanisms by Member states: it is crucial to guarantee the security of supply at the least cost for consumers, if we want to make the energy transition a success in Europe.
Moreover, the European Parliament will vote on the energy efficiency and renewable energy directives, as well as on the Governance of the Energy Union regulation during the plenary session in January. In a context of strong divergences among political groups on those three files, there are many unknown outcomes regarding the final position that the European Parliament will defend during the trilogues, under the Bulgarian, then Austrian, presidency of the Council of the EU. Energy will, this year again, have a major role on the European agenda.

On the national and European level, 2018 will be a key year that will mark the completion of in-depth debates on our energy future and the continuation of a pathway, only at the beginning of the transformation of the electricity sector. UFE hopes that this pathway will be ambitious, innovative and pragmatic at the same time.