Refinitiv Newscasts - EU climate policy chief Frans Timmermans addresses WEF discussion on energy security and the European Green Deal 1

George Weston

24/05/2022 16:07

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Source: Reuters

Description: EU climate policy chief Frans Timmermans addresses WEF discussion
on energy security and the European Green Deal.
Short Link: https://refini.tv/3MGXtqM

Video Transcript:

>> Hi everyone and thank you. First and foremost to my panel by, hi everyone
also in the audience and everyone who's watching at home or in their office.
Now, welcome to our panel on energy security and the European Green Deal. Of
course, the war in Ukraine has highlighted really the vulnerability. >>
European Union energy supplies and underlying the importance of the energy
transition to Europe's energy security. Now before the war, I know everybody
knows this, but it's always a good reminder, Russia was responsible for around
40% of the EU's gas imports, a figure that the block now wants to bring down
to zero this decade. While Europe is burning more coal and seeking energy from
alternative sources that could temporarily raise emissions. It wants to
accelerate the transition in the longer term. Now, a number of CEOs have also
called for a strengthening of the key pillars of the Green Deal by increasing
ambitions in areas like the European carbon market, albeit with more support
for domestic industries. They're also seeking to increase the specialized
workforce needed for the transition to cleaner energy. So I could not be more
delighted to have this all-star panel with me. Pedro Sanchez, the Prime
Minister of Spain. Gitanas Nauseda, President of the Republic of Lithuania.
Anna Borg, President and the Chief Executive Officer of Vattenfall. Frans
Timmermans, European Commission Executive Vice President for the European
Green Deal. And Ester Baiget, the President and Chief Executive Officer of
Novozymes. So thank you all for joining us. I know we have one hour and we
have very big topics to discuss. So without further ado Prime Minister, let me
start off with you. How can the EU at the same time deal with the short-term
challenge of ensuring energy security with this urgent need to scale up the
green transition? >> Well, happy to be here. I think that the European Union
is facing three major challenges in the energy field. The first one is an
unprecedented spike in gas, electricity, and food prices. Second, they need,
as you said, to urgently phase out gas, oil, and coal imports from Russia, and
build our energy dependency and security of supply. And finally, to deliver on
the climate goals. And I think that we need four things in European Union. The
first one is, and I would say the foremost, we must quickly increase the share
of renewables and electrification. Second, we need to accelerate, join a
gastro chase. This is something that we've been very vocal in the European
Council. And also to diversify our suppliers via higher LNG imports and
pipelines from non-Russian suppliers. Third, we need to bolster the use of
biogas [inaudible 00:13:43], and of course, renewable hydrogen. And finally,
thinking long term, I believe we need to actualize to modernize the rules of
the European electricity market. So I think the big lessons that we have to
take from this war is that renewable energy is not only a fundamental question
to face the climate goal, but it's the best allies for the European Union, for
its independency and it's strategic autonomy. >> Thank you so much. President
Nauseda. You've taken actually some pretty impressive measures to be energy
independent, to cut away from Russian dependency. Can you talk us through some
of those efforts? >> We started it very yearly because our long history
experience to deal with Russia was the experience of manipulations,
blackmailing. And this was the reason why we started to implement the first
very important projects in 1999, 23 years before the war in Ukraine broke out.
I have in mind the oil terminal on the coast, on the Baltic Sea. And then the
game changer in our independence story was LNG terminal in Klaipeda built in
2014. But those are only partial measures to increase our security. We
developed also the infrastructure of pipelines. First of all, the pipeline to
the Poland's gas interconnection, Poland-Lithuania, which could satisfy the
needs, not only Lithuania and Poland, but also other Baltic countries and even
Finland. We have Baltic link, which allows us to import electricity from
Sweden. And we have LitPol Link, which allows us to do the same with Poland.
So we have very broad range of infrastructure projects which allowed us
recently beginning of April, to say enough is enough. We are ready to refuse
to buy any energy resources from Russia, oil, gas, and recently even
electricity. We are ready to do this. First of all, because we would like to
be independent. But we also feel the moral duty not to pay for these
atrocities, even indirectly, but still for those atrocities in Ukraine.
Because from our money or using power money, Russia is financing the war. I
think Lithuania is very good example of strong political will. Consistency, no
matter what government was in office. There was certain consistency to reduce
our dependence on Russian energy resources. And now, we are in the final
stage. And of course, one more important project we envisage to implement and
until 2025, is energy-electricity synchronization projects, which allows us to
connect our electricity grid to the continental Europe, and disconnect from
the former Soviet Union brow system. So it will be the final stage of our long
way, and I think this is very good example to our colleagues in Europe, just
you can do the same. Yes, you need the time. But this was probably because
they didn't have any heat illusions regarding Russia. So having very long,
centuries long experience to deal with Russia, we didn't have the illusions.
Sometimes illusions are goods. You can feel happier. You would like to see the
reality brighter than it is, but we didn't have this. And it allowed us to
implement those decisions which are critically needed for Lithinian people,
and for our moral obligations and moral contribution to the Ukrainians fight
for their freedom. >> I mean, it's about resolve, but it's also having that
timeline. And you had much more time than other countries now have. Anna, let
me come to you because of course, Vattenfall is a leader in renewable energy
in Europe. Your objective, which is extremely ambitious, is to deliver a
fossil-free economy in one generation. How would you achieve that? >> Well, we
are actually well on the way. And I think that we have to achieve that if
we're going to be competitive in the future. Because to me, this transition is
not only about mitigating climate change, which is of course immensely
important. And now we have the geopolitical perspective on top of that. But I
also think it's a matter of competitiveness for companies in the future. So
when we phrase our strategy like that, it's clearly our business strategy.
It's not our sustainability strategy, but it is a sustainable business
strategy. So we have started that journey. And as you said, we are one of the
leading renewable energy builders and operators, mainly in offshore wind in
Europe. But I think in order to succeed going forward, and especially with
this more squeezed timeline that we now see, it's important to not exclude any
fossil-free energy sources. We're going to need everything we can get our
hands on. And that goes for wind power, solar power, nuclear, and any other
innovative solutions that can be helpful here. I think that what we need to do
now is to focus on what we can do with the technology that it's already there.
The capabilities are there, and the financial markets are there. Now we need
to widen the bottlenecks in order to get these projects up and running much
faster than what was the case before. And I'm very glad and welcome the
initiative last week also from EU on actually shortening the permitting
processes for building new wind power or solar power, but also needs to
include infrastructure. Because there is a possibility to do this, but we
really need to release the forces that can make it shorter. >> Mr. Timmermans,
I guess that the main question right now is first of all, we get an oil
embargo from Europe. And what happens if there's a gas embargo from Russia?
Like how will we deal with that? >> Well, first of all, we'll deal with it.
We'll be able to deal with it. It will be hard, difficult, but we have enough
solidarity in Europe to deal with it. You saw when Poland was cut off, Germany
immediately jumped in. When Bulgaria was cut off, Greece immediately jumped
in, and that's how we will react. There is no way Putin can blackmail us with
his gas. And if he cuts us off, he's going to hurt himself more than anybody
else. We have our reserves. We are now going around buying LNG and pipeline
gas from other producers. >> At the same time, we offer these producers a
long-term relationship, not just based on fossil fuel, but also based on the
green hydrogen economy of the future. And most of these countries are very
interested to be part of that. I believe you will see the Mediterranean basis
will become the center of the world's new energy supply, which will be green
hydrogen. And Europe will be part of that, Africa will be part of that, the
Gulf will be part of that. And that's extremely exciting because it will
deliver a sustainable source of energy that is almost limitless because of the
way we can create electricity through solar panels and offshore wind. So I
think that's the future. >> In what time frame? >> Sorry. >> In what time
frame? >> Well, I think we can free ourselves of Russian fossil fuels between
now and 2027 at the latest. In that time, we will have to do a couple of
things. First of all, we have to convince companies, industry, and citizens in
Europe to save more energy because the cheapest energy is the energy you don't
use. And what seems a small step for an individual becomes a huge leap if 440
million individuals take that step. So we can still save a lot of energy. That
will already mean less money in Putin's pockets. Secondly, we can speed up our
transition to renewable energy. And one of the elements indeed is speeding up
permitting. We want to create go-to zone where you would do permitting once
for a whole area and then the individual projects would not have to be
permitted one after the other. That would speed up hopefully from now 70 years
to one year in terms of permitting. That makes a huge difference in renewable
energy generation and, of course, rooftop solar. If we fulfill our ambitions
in rooftop solar in the whole of Europe, 25% of all the electricity we need in
Europe will be coming from rooftop solar. That's an incredible amount. And
then as I said, the third part is, for now we will need fossil fuels. We need
to go on by fossil fuels in the Gulf, in Australia, in the United States and
elsewhere, but we need to do it collectively. So what we're asking is European
Commission is from our member states to allow us to negotiate these deals on
behalf of the EU. It's voluntary, but still, I think it will be better if we
negotiate on behalf of the whole EU instead of individual countries go into
Qatar and driving up the price because they're negotiating different deals. So
that's in a nutshell, what we're trying to do. >> Yeah. And we'll ask the
Prime Minister about that. And so talk to us a little bit about what this
means for your company. So what does the transition mean for Novozymes? >> It
is not only for Novozymes. We are an enabler of part of the solution that all
the items that we have to put on the table. The good news is that the
technology is ready. The science is here, the technology is scalable, the
solutions to not completely eliminate fossil-based fuels. I think fossil-based
fuels are going to be part of the future, but in a smaller component. If one
word is very strong here in this cup, it's the word of resilience, the word of
ductility, the word of agility. Having a broader toolbox. I think we live in a
pivotal moment and the crisis of the tragic wars in Ukraine has magnified the
dependence we have on fossil fuels. And we live in a very unique moment that
we can use as an inflection to move a little bit faster to the future. There
is technology available to make gas from biomass. There is technology
available to make bioethanol that can be replacing gasoline that by the way,
it also feedstocks for animal. For every ton of bioethanol, you make a ton of
very high value protein to use and to fulfill another big need that we have of
how are we feeding the world. There is technology available of carbon capture,
but we can give a second life to that vicious carbons. So all options
available, the question is, you made it how fast and how are we moving faster?
I don't have all the answers, but maybe options that we could have. We could
stop subsidizing the past. Today, 70% of the incentives that they are putting
in for the industry of energy, they go to fossil-based alternatives. Only 20%
they go to renewable energy. We subsidizing the problem. Let's use that
precious cash to move fast forward, to make that transition a little bit
better. You mentioned regulation. We need to work more, better, stronger, more
collaborative, and embrace our responsibility also to show how good could like
on bringing the regulation that accelerates the change, that brings the
solution that they are ready more agile, and that they can be plug and play
into the system that we already have. The gap is big. The gap is huge. The
options are available. We have to collectively, governments, companies,
regulatory agencies, find the path on how we can move a little bit faster in
many little incremental steps. >> And I want to ask the Prime Minister about
LNG in a second. But actually, Mr. Timmermans, I guess when you look at the
green transition, will it be halted as we use more fossil fuel to deal with
the dependency with Russia, and then does that transition get accelerated or
does it get slowed down? >> Well, I think countries will make different
choices. So the idea that was before the war predominant, that we would use
natural gas as a transitional energy carrier moving away from coal to
renewables, now that you don't want to import that from Russia, you have to
change your plans. Which means that in some cases, some countries might stick
a bit longer to coal. But if you then can speed up the introduction of
renewables exponentially then in terms of emissions, you might still come out
better. And of course I'd love to exit out of coal faster and not do this, but
the modelling we need to do is based on that. You use coal a bit longer, but
if we go fast on renewables, then in terms of our emissions we could still be
on the positive side. My biggest worry, frankly today, is not the signs, it's
not the technology, it's not even the finances, is the risk of social
disruption. The idea in large parts of our society is that people feel left
behind or not involved. People are dying because of these enormously high
energy prices and I think that's the issue we need to address. The Green Deal
will succeed if we have support of the whole of society, but the whole of
society will not support us if people feel left behind. I think that's a much
more urgent issue that many people believe we think that in terms of the
transition in terms science. >> And Prime Minister, I know this is something
that it's close to what you're trying to, I'll ask you about LNG in a second,
but it's making sure that the families that struggle the most and have the
higher cost of living will not suffer too much in this transition. >> Indeed.
But I believe that security of supply is a collective task. And as Frans just
said, I believe that Southern Europe can provide alternatives to this huge
crisis caused by Putin's war, not only with our energy mix, which in the case
of Spain, 58% of our status capacity comes from renewable, but also, since we
have over 30%, 34%, of the total re-gasification capacity in Europe is located
in Spain. Fifty per cent of the LNG storage capacity of the whole Europe is
located in the Iberian Peninsula, which is the problem that we're facing,
well, physical bottleneck problem, which is of course the lack of
interconnections. And that is why I think it's important what the commission
has released last week with the repower European Union that puts a specific
commitments in order to develop these interconnections between the Iberian
Peninsula and our European Union neighbors. And just last comment on this, I
think it's important that these interconnections and make comfortable not only
the gas pipeline but also the green hydrogen interconnection, because that's
our bet, this is our commitment, our political goal, a goal for renewal and
the green transition. >> What's the hardest imbalance? It's easier said than
done. Is it financing? >> No. I don't think. I think it's a question of, I
would say, lack of political will. As president of Lithuania said, I think
it's important that nowadays we open our eyes, we see that we have
alternatives. Let's do it. And let's go for these interconnections because at
the end of the day, the Southern Europe could provide alternatives to this
turbulent mess that Putin has caused it. President Nauseda if a war were the
doorstep of Europe, does not focus the mind of politicians and if it does not
bring up this political world, then what will? >> It's much easy to [inaudible
00:30:49]. >> To understand. So the question is, we're talking about political
will to make these changes. Do you see the political will within Europe to
make a substantial change? >> I see, and I see that Green Deal agenda is the
highest priority in many countries and in my country too. And this was only
the part of the job we did so far, diversification of energy rules, but
another even probably more important part of our job if we are looking long
term is Green Deal agenda. And we are dedicated to do our best in order to
achieve very significant progress until 2030. And so let me express it in some
figures, for example, right now, we import about 70 percent of our power
electricity we need. Seventy percent, this is a lot. And even if there's
diversification of the electricity supply, of course, this is not sustainable
to pay. So much money on the inward. And until 2030, we have the objective to
achieve self-sufficiency. In this regard, and of course, the main pillars are
onshore wind, offshore wind. We also envisage to implement very important
projects in the Baltic Sea, two offshore wind facilities, taken together 1.4
gigawatt. And it will be possible to participate in the agendas already next
year. So I really use the opportunity to invite the companies to participate
in this project, and also solar energy. Lithuania is the producer of very good
solar panels. And we already export these panels to other countries. And taken
together, we envisage to increase capacity of renewables from one gigawatt
right now up to seven gigawatt until 2030. And that that first trigger of
Green Deal in Lithuania, by the way, was closure of Ignalina Nuclear Power
Plant because according to our agreement with European Union, it was possible
to finalize our negotiations regarding the membership in European Union only
if the precondition that Lithuania closes the Ignalina Nuclear Power Plant,
old type of Chernobyl type reactors, in 2010. And we did it. And the rumors
and the fierce they're huge, that electricity prices will become double as
expensive as before, but at the same time, it was huge motivator trigger to
start to look for alternatives. And it was a first stage of renewables
revolution in my country. Of course, taken together, the very favorable price
setting policy of our government, but still, sometimes the bad things provoke
good shifts, good processes. And now we have just to continue the work we
started one decade ago. >> President, from now, what is the hardest thing to
achieve, so given your goals? >> The hardest thing to achieve probably is
stable generation, because everybody knows that renewables is not the source
of stable generation. Probably we need some basic generation in order to
provide the stability to our energy system, but having in mind these
alternative possibilities to import the electricity from our neighbors, I
think this is the work we can do successfully. And we really would like to be
in the first lines. We would like to be the forefront runners in this process
of switching to green energy. And me, myself, I personally initiated the Green
Lithuania Initiative. And Mr. Timmermans was a part of this event, the first
conference took place one year ago. And we try to gather municipalities,
business, community, NGOs, and ordinary people just to share the ideas, to
share the views, and to do this good growth for Lithuania, to do preserve
green, beautiful Lithuania for next generations. >> And this also goes to
public, private partnerships, I guess. What can private companies' role in
this be? >> Well, I actually think that my main concern is speed of the
development right now. And the reason I'm concerned is that the demand is
clearly there. Right now, my feeling is that the business community is moving
faster than politics, which is probably a good thing because that means that
we can join forces, but I think that's also because a lot of the companies
have realized that the risk of not changing and not transforming into a
sustainable value chain and business model is much higher than the risk of
remaining as is. And I will give you three examples because I think that this
development is not happening in the same value chain as we are used to see in
the energy industry. And the first example is the fact that we joined forces
with SSAB, a steel making company, and LKB, which is a mining company, in
order to produce fossil free steel using green hydrogen rather than coal in
the process. And this has actually been very successful. The qualities of the
steel is exactly as good as traditional steel. And the first off-taker of it
is Volvo. The demand is skyrocketing. So there could have been a sale of much
more of this fossil free steel right now if it was already on the market, but
the reason we were able to develop it was that we looked at this value chain
end to end. Not exactly what is your piece or your piece and what has it
looked like in the past? But how can we solve the problem and create a new
business model? The second example is regarding sustainable aviation fuel,
which is a project we're doing together with Shell [inaudible 00:37:41] in
Scandinavian Airlines using captured carbon from a biomass fired power plant,
combining that with green hydrogen and producing electric fuels. And the third
example is something that we did just this week actually is where we start to
project where we'll build the world's first hydrogen producing windmill, where
it's integrated from the beginning. So not only speeding up the development of
offshore wind electricity production, but also actually producing green
hydrogen directly in the wind farms and piping that a shore. And here we see a
huge demand from different companies and industries that would like to
integrate this from the start. So I think that, yes, the challenges are there,
but so are also many of the solutions. And there's nowhere else to look than
at ourselves to solve this, because we are where we are and we are the ones
here now that need to make this work. >> What can private companies, Mr.
Timmermans do to help? >> Sorry? >> No, I was going to ask Mr. Timmermans what
can private companies, to Anna's point, do to help? >> Well, the advantage is
that they do long-term projections. And the disadvantages of politics because
support is not so stable as it used to be in politics, is that politics has
become extremely short-term. And so if we combine the long-term planning of
private industry with the need to also address short-term issues of our
citizens, then we will be successful. And I don't want to be rude to anyone,
but the fact that energy companies are now pocketing windfall profits,
incredibly high profits, whereas citizens are suffering because they don't
know how to pay their energy bills, and some companies behave as though this
were just a fact of nature, is not helping to create a long-term cooperation
between companies and politics. You have to understand that if you want the
population to support what we're doing, you also have to address their
immediate needs. And the immediate needs of most Europeans today is what are
you going to do about these energy and food prices that I can no longer
afford? And companies cannot shy away from that responsibility either. It's
our responsibility to take care of how we organize it, but it's also the
responsibility of companies, and I would especially address energy companies
to understand that they are not helping if they don't address the issue of
excessive profits. >> Prime Minister. >> Just a question to my dear friend,
France, as Commissioner for energy, don't you think it is the time to also
have a new electricity market regulation? >> Yes, we need to look at the
design of the electricity market because the more we introduced renewable
energy into that market, the less the present system will create the right
price for the customer, but that's not something you can do overnight. That's
something we need to look at very carefully because it took us 30 years to
build this European electricity market. So we have to be careful not to damage
it by taking sudden decisions. So we have to, step by step, adapt the design
of the electricity market. I agree with the Prime Minister on that. It's a
particular challenge for countries like Spain where the part of renewable is
already so big. And then the price is dictated by a relatively small part with
very high natural gas prices. I really understand that predicament, but we
have to make sure in making these adaptations that we don't throw away the
baby with the bathwater, but we need to adapt it step by step. >> But step by
step is what? Five months? Because again, the problem is timelines. You can
have the best intentions in the world, but if you don't adapt to an
ever-changing world, then we're left behind. >> Sure. Sure. Absolutely, but we
also have to get the best possible technical advice on how to adapt that. We
have an agency that looks into that. That agency has given us some advice on
how to start changing it. The commission is putting some proposals on the
table for the leaders to consider at the next European Council. We are
proposing, for instance, in emergency situations to put a cap on the price if
otherwise the whole market will be disrupted. So we're making these changes,
but we have to be very careful, I insist. This construction was built over 30
years and we need to make sure it continues to work because at the end, it
will deliver the cheapest possible energy to our citizens, which is renewable
energy. >> Ester. >> We have to look at this big gap that we're facing with
the eyes of the toolbox of options that they're going to close it. And then
we'll have to seek on the way each of us on how we are going to make it. If
each of us seek for the reasons of why we could not make it. We also have
shareholders that have very short-term interests in mind. But then we seek for
the shareholders that have long-term interests of mind. I think we have to put
the narrative that we bring the population understandable that there is no
jobs in a dead planet. There is no future in a dead planet. There is no
options in a world that goes in the wrong direction. That we have to create
those options, and then yes, work collaboratively. We have the responsibility
to bring those solutions and to be cost competitive. We need help from the
regulation. We really need help on the acceleration that accelerates the
future and then we need to also seek from the full, you mentioned that a
little bit, France, its energy is very important, but it's also food. That's a
big crisis that it's on the table. Well, again, there are solutions available.
But we have to look for the answers beyond the answers of the past. Same way
that for energy, the answers are not anymore only fossil-based, we're looking
at other options , is the same with food. There is a need of increasing the
protein demand for fulfill the nutritional needs of the population. Well,
there's an option of alternative proteins that fulfills the nutritional needs,
but leading to much lower impact on the landfill. Only if 10% of the protein
demand would be from alternative proteins, that would relieve 50% of the
European land that is used for agricultural. That will fix, alleviate a lot of
the tension that we're facing here. But here again, options are there,
technology works, but we need to create that value chain approach where
regulation also needs to be in the loop on how we are moving faster, bolder,
into the future. >> I'm just saying, I agree with you 100%. And if we don't
change our ways, our children will be fighting wars over water and food. It's
that serious. So we are faced with a fundamental crisis, which is the climate
crisis in the biodiversity crisis. But I also want to draw your attention to
the fact that somebody who doesn't know how to make it to the end of the
month, can't be bothered with the end of the world. They want us to face the
issue of the end of the month and that's how you bring them along in a
narrative about the end of the world. I'm just saying, as a politician, that
is my biggest worry today. Social disruption because people feel left behind.
>> Can I ask you, because I spoke actually, Mr. Timmons to a Chief Executive
of an Italian energy company. He was saying, windfall tax is a good idea, so
why have some governments in Europe still not put them in place? Why are they
reluctant? >> I have no idea. I just don't get the logic of it. You could do
several things. You could say, in these situations where you have these
excessive profits, we will tax that, but only in that situation. So if that's
no longer there, we will stop immediately without taxation. You could do that
or you could say, we will tax part of it and the other parts, boys and girls,
you will invest in renewables and then we will not tax it. But now you said
20% only. I think it's even lower than 20%. >> I was generous. >> We really
need to force them to put more into renewables as well. >> Who is them? >>
Well, especially the big oil companies. They're the ones, I think they're only
investing 4%. >> No. I was talking about the subsidiaries from the government.
>> I'm just talking about oil companies, 4%, if I'm correctly informed. And
then they said, we doubled our investment in renewables, wow, 4%. So we still
have a world to win here and we need to push them more. >> Anna. >> I would
like to add on one perspective because I completely agree with the importance
of protecting the vulnerable groups in society and making sure that everybody
is along in this journey because otherwise it will not happen. I also think
it's important when considering updated market assigns to remember that the
fundamental problem is a demand supply problem. We want to have more supply of
fossil free electricity and energy in Europe and how do we foster that? It
might not be a market design issue only, there might be other things as well.
And when it comes to investments into new energy production, that's
investments that will have to last for 25, 35 or 40 years. So the fact that
this prerequisites in order to invest are fairly stable, is also very
important for this to happen. And I think that if there's going to be a
taxation, I think it's important to target the right things as you rightly
point out, there might be fossil fuel components that you would like to taxate
in order to speed up this transition. But it needs to be carefully done so you
don't, at the same time, hamper the investments into new renewables. And I
can't speak for the oil companies, but I know that in our case, 50% of our
investments go into new renewables and pretty much the rest goes into taking
care of the existing renewables. So I think it's important how you tailor
this. >> Prime minister, can I ask about renewables, because you have a hugely
ambitious goal actually for Spain from 47% of the energy used, thanks to
renewables, in 2021, by 2030, you want 74% of electricity generated by
renewables. How will you achieve that? >> Well, by the way, Spain was one of
the first countries in Europe that we face all these problems of the windfall
profits and to intervene the market. I don't know why. It is for the
mainstream politicians, also economists really normal to intervene the
financial sector when it doesn't work. But it's so difficult to intervene the
energy sector or the market when it is clearly not functioning in Europe.
We've been advocating for regulatory review of the electricity European market
since 12 months before the war. We started to speak about it in European
Council, also with the commission and I think that we need France to speed up
reform because definitely, it doesn't make any sense to pay or to have this
spike gas price and that is at the end of the day poisoning the electricity
market and, of course, the electricity bill for SMEs, industries and families.
And if we want to have social support for these green transition, we need to
be much more ambitious at the European level in order to face these challenges
that we are now sharing. But of course, we're very committed with the green
transition. >> Prime Minister, why do you think it has been so slow? >> Well,
I think it's difficult to move status quo. >> But at the end of the day, we
are in a very defining moment. Those governments, like the governments that
were present here, were very committed with the green transition. We don't
want to use the pandemic or even the war as an excuse not for going this green
transition, because we know what is at stake. The thing is that, of course, as
I said before, it is difficult, I don't know why, to intervene the energy
market, the financial market when it doesn't function. Politicians and also
economists, they go for an intervention. And it's clear that we need an
intervention at the regulatory framework. Of course, we're putting a lot of
money. From the next-generation European Union funds, Spain will receive, in
the next years, €70 billion. We're allocating 40% of those €70
billion in green transition. But of course, if we need to keep the social
support and understanding to this huge challenge, which represent the green
transition and the climate change, we need also to actualize and to modernize
our electricity regulatory framework at the European level. If we don't do
that, we are going to put it in risk all the green transition. And we are now
witnessing the effects on the financial speculation that the ETS market is
suffering and, of course, the electricity bill for families as a miss on
industries. It doesn't make any sense that we pay gas prices when we have a
very competitive energies such as renewable energies. >> I just wanted to say
and use this opportunity to say that in order to increase the resilience of
our society and our economy to unexpected price shocks, it's very important to
find more than smart solutions for energy consumers. And I don't know how
widespread is this experience, but we use so-called remote prosumers, the
policy in Lithuania. It means that actually every single resident of the
multi-apartment house has the right to acquire this type of solar plant and at
the same time can enjoy, for example, 25 years, the electricity price is zero.
There is no need to be just afraid of unexpected price shocks because you are
at the same time consumer, but you are at the same time producer of the
electricity. And behalf the initiative in Lithuania where the state
institutions are already involved in this project and presidential office just
wants to take the leadership in this showing the way that other institutions
can participate too. But this is important that also the households could be
ready to participate in this project too. Of course, there's the issue
probably of social inequality because the people without the initial capital,
they cannot participate in this program and it brings even more social
inequality in the society. But this is very good instrument to invite, to
encourage people to use modern technologies, modern techniques in order to be
a part of the game. And one more issue I would like to touch is, of course,
energy efficiency. We didn't talk about energy efficiency, but this is very
important too because we have untapped potential to reduce energy consumption
per GDP units in my country and this is a part of the problem. I think we have
to do more and we have to continue our renovation program of our
multi-apartment houses. We started it very well, but so far we are in the
process. And if we finalize this program, I think our energy efficiency in the
country will be much larger than it is now. >> To a point actually that the
President made, does renewable energy needs to be cheaper than fossil fuel? Or
has the war in Ukraine actually changed that through, in terms of pricing, to
make it very appealing? In what timeline can we see that? Who wants to answer
first? >> It's the cheapest already now. >> It's already the cheapest. >> Not
all of it. Because you have a huge capital investment to start off with. >> If
you look today at building new electricity production or electricity
generation, then it's clearly the cheapest way to do that, is to build onshore
and offshore wind and solar, for sure. So that is clear already today. Then
you need an energy system which you have an holistic view on because you need
to have different kinds of fossil fuel energy sources and different kinds of
flexibility and storage in order to be able to manage the total system. But I
think it's important, once again, to remember that the fundamental problem
here is a discrepancy between demand and supply. And the knowledge, the
capability and the capital to provide that additional supply is there. So
there's regulatory framework or political decision-making need to make sure
that there is a widening of the bottlenecks to enable all of this to actually
come to market as soon as possible. And then we're talking about securing
supply chains, we're talking about these permitting processes and the timing,
we're talking about providing land and sea to actually build on, and also take
care of these social concerns around how to build these new business
opportunities and let everybody take a part of the upside of that. And for
those where it might not be possible, actually take care of the vulnerable
groups. But to facilitate this, rather than creating uncertainty about the
investment prerequisites, is going to be critical. >> You mentioned wind, it
also has to be 100% reliable. I live in the UK, were there are wind farms, but
if there's no wind, we had to resort to call last year. >> I just want to pick
up on the President Nauseda as in his point about energy efficiency. If we
double our efforts in refurbishing buildings, office buildings, official
buildings, housing, we will save an additional 20 billion cubic meters of gas
every year. Twenty billion cubic. That's huge. At the same time, we will
immediately bring down people's energy bills. Because if they have solar
panels and heat pumps instead of what they're doing now, their energy bill
would drastically be lower. And even if they rent, the rent increase through
this refurbishing will be a lot less than the decrease in their energy bills.
So they make money and they get a much better house at the same time. So we
need to really speed up that and we need to give the good example by beginning
with office buildings, with schools, with hospitals. Spain has a massive
program on that. And it really works. And if you do it for private housing,
you can show people your house is better and your energy bill is lower. And at
the same time, that money is no longer going into Putin's pockets. So it's
win, win. And that's where we need to speed up. And we can do that. And it
also brings local jobs. These are jobs on the spot. This is smaller,
medium-size enterprises doing that. So it's only advantages and the money is
there. And Spain has presented us with a recovery plan that is triple A,
really very good. And part of that is also to put money into that. Lithuania
is doing exactly the same thing. And that is bringing us really huge
advantages that are bankable with our citizens as well. >> I agree. Ester. >>
Building on your comment on cost, we have to be true to ourselves when we look
at the real cost of one option or one alternative versus another. Yes, green
energy, green alternatives to fossil base or bio gas from biomass, bioethanol,
they are competitive from a cash cost point of view. They are very
competitive. Then you need the capital intensity. But what is the real cost of
the fossil based alternatives? What is the cost of the CO2 emissions? What is
the cost of flooding? What is the cost of climate change? What is the cost
that we all observe with the health aspects or insurance? Those are just
hidden costs, that they are not observed by anybody. As a thought, the concept
of carbon pricing, putting a real cost, making the hidden costs visible, it
would truly drive the momentum to the most cost competitive alternatives.
Which are the bio-based solutions? Which are the green alternatives? They are
the most competitive. But we have to self-help us that when we look at the
costs and when we compare the economics, we really look at the full P and L,
not only the one of one little component. >> Prime minister, what will be your
biggest challenge in actually moving to 74% renewables by 2030? >> As Frans
said, I think it's the most important challenge for politicians is to keep on
board the majority of our society. For that, I think it's important that they
see the profits of this green transition and try to avoid measures that could
have a regressive impact on those who are suffering the consequences of first
the pandemic before the financial crisis and nowadays, the consequences of
this terrible war. >> This is very important issue and I would like to chew on
the Prime Minister of Spain by saying that this is very important to get all
the groups of our society on board. Even if the prices of carbons will go
down, maybe it will happen in the future, we have to keep this motivation to
go forward because this is not only about the price, this is about the future.
This is about the Green Deal. This is about the climate change objectives. I
think this is a main challenge, but at the same time, the main task for the
politicians to involve all the groups of the society into this very important
project. >> Anna, what do you think is the main task for growth, I guess
private sector leaders and politicians? >> I think that the clarity is
important and we now see alignment around the long-term and mid-term targets ,
and that's really good. But we also need to see enough action short-term in
order to speed up what we are now supposed to do. So I think that's where we
need to go to work together to make sure that we can widen these bottlenecks
in order to release the forces that we have now because again, the technology,
the capability and the capitalists are there, and now we finally have in the
alignment on the long term view as well. I think it's interesting as you said,
that these days the companies are long-term and politicians are short-term
because usually it used to be the other way around, at least according to the
public discussion. What does that say? How do we align on what needs to be
done here and now in order to drive the development soon enough? >> Mr.
Timmermans. >> I think it's so important that we combine long-term goals with
short-term successes, because that's how you keep people on board for this
long-term journey. I think that is of the essence and we can do that. We can
do that in this refurbishing of homes. We can do that in offering more
charging infrastructure for people who consider transiting to electric
mobility. We can do that through cyclic paths. We can do that through greening
cities, which is happening, just imagine in Spain, if you really green the
city more than you do now, you bring the temperature down, you bring the air
quality up, 400,000 Europeans died prematurely because of bad air quality
every year. You could do something about this immediately. So combine this
long-term goal we have with immediate, concrete, visible, tangible results for
our citizens and they will be on board. >> With more financing or as we are?
>> Well, I think because of this war, sooner or later, you will be faced with
a question of financing. We are now scraping the bottom of the barrel to
finance repo review. We're doing everything we possibly can, but the budget is
the budget and we can't go beyond that. So sooner or later, there will be a
moment of reckoning when our leaders in the European Council will have to ask
themselves, is this money we have enough to face the challenges? I think the
answer will be no, once we understand how important it will be for us to help
the reconstruction of Ukraine. I think that is of essential importance for
Europe, but that is something our leaders will face at a certain point, very
difficult discussion, but I think this is something they will face sooner or
later. >> Ester. >> I think it all boils down to a collaboration to embracing
that we all win or we all lose, and we have to do this together. That is the
short-term and the long-term, but actually the long-term, it's many many
short-term one after the other. So it is working collaboratively, setting the
path of what is possible and how we're moving, and then celebrating success.
The point you mentioned about the narrative to the population that we bring
health and enhancing the education, education maybe that's enhancing the
knowledge and understanding of how good looks like. Of course, I worry about
the short-term, but it cannot be only the short-term. So building that
narrative collectively on how success looks like, and then moving jointly
through technology, through solutions, through inventive, through regulation,
that moves us up in one direction. >> We're almost running out of time, so one
final question for each of you. What is your priority in the next 12 months
personally, to make a difference in the green energy transition? So if you
have one priority that you want to make sure it gets done in the next 12
months. Prime Minister. >> Well I think it's to give certainty political
certainty and political will that the Spanish government is committed with the
queen transition. And we're not going to move back, but to move forward in
this endeavor. Of course, to accelerate the execution of the European forms,
which I think is crucial for not only the economic recovery, but also the
modernization of the Spanish economy. >> President Nauseda. >> I will continue
my green routine initiative and my efforts will be dedicated to get as many
institutions, business entities, and people on board participating in this
very important project. >> Anna Borg. >> I will focus on two things. First of
all, I will continue to reshuffling of our asset portfolio and our investment
into even more fossil free electricity generation. Secondly, I will work on
these integrated value chain partnerships because that way we can not only
create good business opportunities, but have an impact beyond our own size,
even if we are one small part of this fossil for steel cooperation, steel
producing industry is emitting 7% of the world's total CO_2 emissions. So if
we can make these value chains work, we can have an impact way beyond our
size. >> Frans Timmermans. >> My top priority is to cement European unity in
the face of Russian aggression. That is my top priority for the next 12
months. We need to stay united, we need to stay strong because Putin will not
stop if he's not stopped in Ukraine and he's going to look for cracks in
European unity. What he's been doing for the last 20 years, trying to divide
us so that he can rule. So my top priority is European unity. To do that, the
Green Deal is essential, to do that, repower reuse essential, to do that is
moving forward faster in that direction is essential, but also in creating
global partnerships for LNG and beyond that for green hydrogen, that would be
my top priority for the next year. >> Ester Baiget. >> Do our fair share of
the transition for us as a responsible producer, we already reduced 46% of our
CO_2 emissions in which started in 2018. Continue in that direction, embraces
Scope 3. We already have a scope. Not only Scope 1 and 2, also Scope 3,
reductions of all the torque, but then ensure our solutions are part of the
enablers. We're not going to fix the wall, but we want to be a stronger
component, a stronger enable of greener alternatives for fossil based
sustainable nutrition. Be a stronger enabler through biology, through enzymes,
through microbes, through proteins of a better one. >> Well, thank you so
much. Can we please give a big round of applause to my wonderful panel, Pedro
Sanchez, the Prime Minister of Spain Nauseda, Anna Borg, Frans Timmermans and
Ester Baiget. Thank you so much. >> Thank you