Commissioner-Designate Jørgensen’s vision for EU energy – Technology neutrality, clean hydrogen, and investment challenges
Energy has taken centre stage on the EU’s political agenda over the past couple of years, in the wake of Russia’s invasion of Ukraine, which has reshaped Europe’s geopolitical landscape. Since then, Europe has faced the challenge of ensuring energy independence. At the same time, it has had to manage energy costs that place immense pressure on citizens, businesses, and the competitiveness of industries. All of this is happening while Europe also attempts to decarbonise the EU energy system.
This context set the stage for Tuesday’s hearing of Commissioner-designate for Energy and Housing, Dan Jørgensen. Appearing in front of the Industry, Research, and Energy Committee (ITRE) and Employment and Social Affairs Committee (EMPL), the former Danish climate minister spent over three hours outlining his vision for the legislative term and responding to questions about his portfolio, aiming to win the support of Members of the European Parliament (MEPs).
In the opening statement, the Commissioner-designate stressed his intention to simultaneously address energy security, decarbonisation, and affordability.
To quote the Danish candidate,
Almost all of the things we need to do to decarbonise our societies are also for our competitiveness and they will also raise the standards of living for our citizens.
But how does he plan to achieve his triple mission? What insights did the hearing provide, and what crucial points were left unanswered?
- Aiming for technology neutrality: Expanding the portfolio
Deploying a broad range of low- and zero-carbon technologies will be vital to reaching climate neutrality by 2050 and ensuring energy security in Europe. CATF has been a long-time advocate for the EU to embrace a diverse set of clean technologies and adopt an optionality-based approach, recognising that different sectors and regions may need to use different tools, and acknowledging the inherent risks of decarbonisation pathways relying on too narrow a set of solutions.
Following the explicit reference to technology neutrality in his mission letter, Commissioner-designate Jørgensen reaffirmed the objective to follow a technology-neutral approach during this legislative term. He referenced technologies such as carbon capture and storage (CCS), clean hydrogen, and Small Modular Reactors (SMRs), and highlighted the need to plan for long-term objectives, while delivering in the short term.
However, the stated commitment to technology neutrality has yet to be formalised through tangible actions. Further details are still needed to determine whether this goes beyond a cosmetic change and will, in fact, lead to balanced support for all the technologies that can play a role in the decarbonisation of the EU.
- Clean hydrogen: The need for a practical and realistic path forward
Looking at specific technologies, clean hydrogen was high on the agenda as ‘an important part of the puzzle for a functioning clean energy ecosystem in Europe’. However, despite the EU placing significant emphasis on clean hydrogen in the last term, the bloc remains far from achieving its deployment objectives, as was stressed recently by the European Court of Auditors.
In his hearing, Commissioner-designate Jørgensen acknowledged that clean hydrogen deployment is not at the stage planned. He stressed the need to address both demand and supply and to go ‘up in scale, down in price’. His mentions of potential further actions to address hydrogen infrastructure, transport, and funding are commendable, as these are essential preconditions for a functioning European hydrogen market.
However, the Danish candidate could have gone further in his remarks: the Commission needs to acknowledge that its production and import targets for electrolytic hydrogen are unrealistic and develop a comprehensive roadmap to maximise the impacts of deploying the limited amounts of clean hydrogen available.
The Commissioner-designate stressed just how crucial clean hydrogen will be in decarbonising hard-to-abate industries and modes of transport. While this is indeed the case, given the limited amounts likely to be available for the foreseeable future, the Commission has to devise a sensible prioritisation framework, to steer clean hydrogen to the sectors that need it the most.
- Geothermal energy: A domestic and abundant energy source takes the spotlight
A major highlight of the confirmation hearing was the commitment to deliver a European geothermal strategy. Geothermal energy could provide clean, firm, and virtually inexhaustible energy to help Europe transition away from foreign fossil fuel dependency. Though somewhat overlooked during the last legislative term, interest in geothermal has surged over the past year as the EU can’t afford to ignore a clean and domestically-produced energy source. In fact, the European Parliament has called for a dedicated strategy to encourage wider adoption of geothermal energy – an appeal that now appears to be noted by the European Commission.
For that strategy to be effective, the new Commission will need to go beyond traditional geothermal solutions and incorporate cutting-edge, innovative technologies such as superhot rock geothermal energy. Just 1% of Europe’s superhot rock resource has the potential to provide 2.1 terawatts of energy capacity, which could generate nearly 18,000 terawatt-hours (TWh) of electricity. However, unlocking this potential will require EU-wide support and coordination to bring this clean firm technology to demonstration and commercialisation.
- Nuclear energy: Considering the potential of different power generation pathways
Commissioner-designate Jørgensen was strongly pressed by MEPs on his positions and plans with regards to nuclear energy. The candidate acknowledged the role of this clean energy source in the EU transition and stressed that Member States have the right to decide their own energy mix.
He promised that nuclear energy will be part of the upcoming Clean Energy Investment Plan and announced a forthcoming report to assess investment needs in the sector.
More and more EU countries have been exploring the idea of deploying SMRs as part of their decarbonisation strategies. On this subject, the Commissioner-designate vowed to pay close attention to the recommendations being developed by the European Industrial Alliance on SMRs.
- The money question: How will the clean energy transition be funded?
Building the infrastructure for a fully decarbonised energy mix will require substantial funding and support for clean energy deployment. The recent Draghi report also stressed the urgent need for large-scale European investment in the EU economy. However, in yesterday’s hearing, details on the specific investments and funding needed to drive the energy transition remained vague and sparse. While there were mentions of a clean energy investment plan and measures to attract private capital, it is still unclear whether any additional funding will be made available. Similarly, proposals to adjust state aid rules were mentioned as a potential solution, though these should be carefully balanced with cohesion considerations, given the varied fiscal capacities of EU Member States.
Overall, it was made clear that it is not within the Commissioner’s power to increase the available EU budget. Given Member States’ strong influence over the EU budget limits, the upcoming Multiannual Financial Framework (MFF) negotiations will be crucial to determine the support available for the EU transition.
The Commissioner-designate received support from a two-thirds majority, and was confirmed by political groups from the Greens to the Conservatives. The coming months will be crucial to flesh out the idea and initiatives mentioned, and to better assess his ability to deliver on the ambitious goals.
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Commissioner-Designate Jørgensen’s vision for EU energy – Technology neutrality, clean hydrogen, and investment challenges, source
