Europe’s left wing engages in the fight against energy poverty

Malte Fiedler

Report on main results of the strategic workshop on Renewables and the Electricity Market Design in the EU

Left-wing forces at the European level are addressing the growing problem of energy poverty. That is one of the key findings of the strategic workshop titled “The Future of Renewables and the Electricity Market Design in the European Union”, which was held at the European Parliament in Brussels on 27 June 2016.

On the European energy policy front, the coming year is likely to see tensions running high and heated debate on the direction that the energy transition in Europe should take in future. The revision of the Renewable Energy Directive (at the end of 2016) and the draft of the European Commission on a new energy market design are likely to make existing disagreements concerning the creation of the internal EU energy market (cf. Fiedler 2015a) even more acute.

The European Commission is planning to extend the political project of the internal EU energy market, overcome the necessary hurdles (in particular the differing national funding models, subsidies and price regulations), align standards and market access rules and expand cross-border energy infrastructure. The aim is a common market in which electricity can be traded without restriction across state borders as a commodity. The intention is both to guarantee security of supply and promote the competitiveness and sustainability of energy production right through to final consumption.

At the same time, the fossil fuel industry is busy establishing capacity markets for nuclear energy and fossil fuels across Europe as part of the internal energy market to hinder emerging renewables and protect the industry’s own profits in the near future at least. Owing to changes made to Germany’s Renewable Energy Sources Act by the governing coalition of the Christian Democrats and the Social Democrats, the development of renewables is already being set back. Renewable energy projects at the local level are particularly affected. However, investments in research into renewable technologies are also on the decline overall. In this context, the Rosa-Luxemburg-Stiftung, Brussels Office and the DIE LINKE delegation in the European Parliament hosted a strategic discussion on the European energy union with the participation of the Transform Europe network.

First steps towards a left-wing network on European energy policy

In the debates on energy policy at the European level, a major problem is that the progressive social and ecological forces lack a common energy policy vision. There is an urgent need to adopt a joint strategic approach to the upcoming conflicts concerning the European energy union and the internal energy market to ensure that the European energy transition is not geared solely to the interests of large corporations in future.

The workshop was an important step in the right direction. The participants came from a broad spectrum. Several Members of the European Parliament from the left-wing GUE/NGL group were represented, namely Cornelia Ernst from the German DIE LINKE (The Left), Neoklis Sylikiotis from the Cypriot AKEL (Progressive Party of Working People) and the Spanish representatives Paloma López Bermejo from Izquierda Unida (United Left) and Xabier Benito Ziluaga from Podemos (We Can). Eva Bulling-Schröter, energy and climate policy spokeswoman of the Left Party parliamentary group in the Bundestag, and other energy policy experts from the German DIE LINKE (The Left), the Danish Enhedslisten – De Rød-Grønne (Unity List – The Red–Greens), the Greek Syriza (Coalition of the Radical Left), the French Parti de Gauche (Left Party), the Hungarian Balpárt (Left Party) and the KPÖ (Communist Party of Austria) also engaged in the debate. In addition, numerous representatives of civil society organisations participated in the workshop, including the NGOs Greenpeace, Friends of the Earth, Oxfam, Corporate Europe Observatory and the European Consumer Organisation (BEUC), as well as the European Trade Union Confederation (ETUC) and the European Federation of Public Service Unions (EPSU). The views of “green capital” (cf. Haas/Sander 2013, Fiedler 2015b), i.e. the renewables industry, were also put forward by a representative of the European Renewable Energies Federation (EREF).

The discussions that arose made clear which issues could potentially form the basis for an alliance and in which areas the interests and goals of the participants differ with respect to shaping EU energy policy. The discussion was based on a position paper (known as a “non-paper”) of the four MEPs from the GUE/NGL group who were present. The focus was on what position the left-wing group in the European Parliament should adopt on the new energy market design and revision of the Renewable Energy Directive, and what shape potential solutions to the challenges of energy poverty and the phase-out of coal-based power generation could take.

Left-wing energy transition to combat energy poverty

According to the MEP Cornelia Ernst, up to 125 million people in the EU have trouble paying their energy bills. Up to 12 per cent of EU citizens are affected by energy poverty. The MEP Neoklis Sylikiotis expressed the view that the underlying problem lies in the increasing tendency for energy to be treated as a commodity under prevailing European energy policy, whereas from a left-wing perspective energy should be a common resource. The aim therefore is to ensure equal access to energy for all in order to combat energy poverty effectively. It was therefore noted by several participants that a social and ecological energy transition must necessarily counteract the interests of multinational energy corporations. As the climate activist Fabian Hübner underlined in his contribution to the debate, care should be taken that the energy transition is not misappropriated by energy giants.

One of the major conflicts concerning European energy policy is over the level that common goals for the expansion of renewables should be set at and whether they should be binding. While the EU heads of state and government have only agreed to increase the renewable energy target to 27 per cent of energy consumption by 2030, the European Parliament is calling for a binding minimum target of 30 per cent. Left-wing forces in particular, however, are pressing for a much higher binding goal of 40 per cent renewables by 2030.

While there is strong consensus on the need for a rapid energy transition, there remains disagreement as to who should be driving the energy transition from a left-wing perspective. Jörg Mühlenhoff from the BEUC consumer organisation, for example, mainly emphasised the need for citizens to play a more active role in the energy transition as “prosumers” (an amalgam of “producers” and “consumers”) and called for a right to market participation, while the representatives of the European Federation of Public Service Unions (EPSU) and the energy experts of Syriza and the Parti de Gauche championed the role of state-controlled companies. As Giorgos Chondros from Syriza noted, under the austerity policy demanded by the European Troika, protection of public control over energy corporations is the only way of preventing even more people from being excluded from the supply of energy.

The participants shared the view that there should be a right to energy and that energy should be considered a common resource, rather than a commodity. The role of public-private partnerships in the energy transition, as mentioned by Dirk Hendricks from the European Renewable Energies Federation in his contribution to the discussion, was not debated. Consensus was all but reached on the need to prevent further privatisation and deregulation of the energy sector. The participants agreed on the need for provision of public services instead of focusing on profits. Theoretically at least, that can be ensured by means of local energy democracy projects, municipal utilities and state-controlled energy enterprises. However, the MEP Xabier Benito Ziluaga made clear that liberalisation during internal market integration is a threat to precisely such initiatives. He therefore proposed that EU funds should be made available to promote civic energy.

However, it remained open whether targeted efforts should be made to achieve an internal energy market project that is more socially just, as called for by the NGO Client Earth, or whether the political project of the internal energy market should be rejected in its entirety on the grounds that under existing power relations any further Europeanisation and centralisation with respect to energy issues would be a step in the wrong direction. Pascoe Sabido from the Corporate Europe Observatory highlighted the unequal structural division of power within the EU institutions – he calculated that 71 per cent of all meetings of the European Commissioner for Energy and Climate Action and the Vice-President of the Commission for the Energy Union in the past year were held with representatives of the business and industry lobby. Moreover, such meetings were chiefly with energy sector organisations and corporations that belong to the “grey capital” camp, i.e. the nuclear and fossil fuel industries.

Fossil fuel phase-out law instead of capacity markets

In addition, Europe’s future energy mix was discussed. It was noted that pursuant to Article 194(2) of the Treaty on the Functioning of the European Union (TFEU), each Member State is in charge of its own national energy mix. MEP Cornelia Ernst expressed the view that a common energy union only makes sense if that challenge is met head-on. Despite the valid provisions in primary law, energy policy decisions at the European level even now have a major influence on each country’s national energy mix. European agreement on capacity markets would give a massive boost to “grey capital” (see above) and set the energy transition back even further. Instead of capacity markets for nuclear and fossil energy, the participants therefore called for a fossil fuel phase-out law.

However, the fact that such a step requires a further shift in the balance of power is demonstrated by the failure of the planned climate protection levy on coal-fired power stations in Germany, which, according to Bundestag representative Eva Bulling-Schröter, was blocked under pressure from the industrial trade union BCE and the fossil fuel industry. Representatives of the European trade unions ETUC and EPSU noted therefore that the interests of employees in the nuclear and fossil energy sectors should not be disregarded in the course of strategic deliberations. Training and professional development measures would be insufficient in that regard; instead a European fund is needed to achieve the necessary structural change along the lines of a “just transition”. Overall, social dialogue and a strategy on industrial policy are lacking with respect to energy issues. That is relevant not only to jobs in the fossil fuel industry and energy sector, but to the labour market as a whole. Ultimately the way in which we produce and live is also shaped by what energy resources we use. It was proposed that there should be insistence on an assessment of the impact that the new energy market design and planned decarbonisation will have on employment.

Tara Connolly from Greenpeace stressed the need for a good compromise in the debate on capacity markets. The strategy should be to drive nuclear and coal-based electricity from the energy market. The EREF representative also advocated a regulated phase-out of fossil fuels. By contrast, surprisingly little was said about the part to be played by gas in the future energy mix. The Corporate Europe Observatory remarked in passing that in the past two years there have been increased meetings between representatives of green capital and the gas industry; that might be a sign at least of potential future alliances beyond left-wing strategy options.

Although all participants agreed that renewables should play a defining role in Europe’s future energy supply, views differed as to which energy sources should be classed as renewable and whether decentralised or centralised plants should mainly be promoted. Addressing the question of the right technology, Marc-Olivier Herman from Oxfam espoused the view that biofuels should not qualify as renewables under the Renewable Energy Directive on the grounds that they actually increase greenhouse gases and fuel conflicts over land in the Global South and elsewhere. Competition with food production was also highlighted. By contrast, in a written comment Jean-Claude Simon, energy expert from the Parti de Gauche, underlined the role of biogas in the transport sector. Commenting from the French perspective of an energy mix with a very high nuclear ratio, the representative of the French Communist Party called for consideration to be given to the important role that nuclear power (still) plays today. It is clear that further discussion within the left-wing GUE/NGL group in the European Parliament is still needed on this question.

Key outcomes of the workshop

Nevertheless, a number of points of consensus crystallised during the closing discussion. It was declared, for example, that the joint energy policy vision should not be geared to a liberalised internal EU energy market in which large energy corporations in particular have vested interests. Instead, the left-wing vision should be aimed at a democratically controlled, decentralised energy system. The key question is what strategies should be pursued to implement that vision and what possible alliances can be forged to get closer to achieving that goal. The challenge of rising energy poverty was jointly identified as a pivotal topic to bring social and ecological forces and interests together.

In terms of practical steps, it was emphasised that public investments and funds could be used to combat energy poverty, e.g. by promoting energy efficiency in the construction sector. In addition, free basic supply for each household was discussed. It was noted that households with lower incomes often have higher energy consumption owing to lower energy efficiency, which means they face a disproportionate burden. The alternative would be to suspend the tax on energy in the case of low-income households. Despite having good ideas, it will be tricky for left-wing forces to attain majorities to combat energy poverty. A section on energy poverty was voted out of the report on renewable energy progress that was adopted by the European Parliament on 23 June 2016, as the rapporteur from the GUE/NGL group, Paloma Lopez Bermejo, noted.

It was therefore agreed that the next steps will be to develop the position paper drafted by the four MEPs from the left-wing GUE/NGL group and continue the joint discussion on that basis with the aim of first reaching agreement on a strategy within the GUE/NGL and then to create a vision in the medium term to ensure the left wing can hold its own in the coming debates on the energy union and internal energy market. In addition, the decision was reached to set up a European working group on energy poverty. However, building a social majority for a socio-ecological energy transition will be just as important as the focus on parliamentary projects, if not more so. The strategy workshop was therefore one of many necessary steps.

– Fiedler, Malte (2015a). The Making of the EU Internal Energy Market. Policy Paper, Rosa-Luxemburg-Stiftung Brussels Office.
– Fiedler, Malte (2015b). When the Windmill Turns: From Renewable Power to Shifting Power Relations? Competing Hegemony Projects over the making of the EU Internal Energy Market. Master Thesis. Berlin School of Economics and Law.
– Haas, Tobias & Sander, Hendrik (2013). Grüne Basis: Grüne Kapitalfraktionen in Europa. Eine empirische Untersuchung [The green base: green factions of capital in Europe. An empirical study]. STUDIEN Rosa-Luxemburg-Stiftung [Rosa Luxemburg Foundation STUDIES].

Author: Malte Fiedler (znygr.svrqyre@qvr-yvaxr.qr)