Public investment in energy infrastructure as part of the solution to climate issues

Key points

The EESC:

• Believes that the consequences of the climate crisis are having a major impact on Europe and the world. Experts point out the insufficient mobilization of funding, insufficient engagement of citizens and the private sector, and the lack of political leadership to adapt to climate change.

• Recommends doubling investment in the electricity grid to EUR 55 billion per year and to increase the budget for building clean generation capacity to EUR 75 billion per year, to meet increasing demand for electricity and achieve the climate objectives.

• Considers that market design and regulation must be adapted to new future realities in which renewable energies prevail (including more decentralised production and increased on-site consumption).

• Welcomes therefore the Commission’s intention to explore options to optimize the design of the electricity market and is strongly in favour of market assessments to analyse the behaviour of all potential players in the energy market as well as the energy market design.

• Invites the Commission to examine the issue of the advantages and disadvantages of public and private ownership and/or private financing of energy infrastructure for a well-functioning energy market in its planned assessment of options for optimising the design of the energy market.

• Is convinced that particular attention should be paid to defining grid development as an overriding public interest, including climate protection as a regulatory objective and, more generally, synchronising the planning of renewable energies and the electricity grid more effectively.

• Believes that blended finance involving private investors is only an option if it can be ensured that allocations are transparent and that there are no unjustified additional costs for the public authorities compared to public financing. There must be full transparency regarding justified additional costs.

• Is concerned that the extremely high profits of energy companies on the one hand and the increased energy poverty caused by energy price surges on the other may have a dangerous destabilising effect on society.

• Proposes that these profits be skimmed off with the help of taxes and passed on as financial compensation to energy consumers and used for the expansion of renewable energy production and the necessary grid infrastructure.

• Takes the view that in order not to discourage energy companies from investing in low-carbon solutions, such taxation should be defined very sensitive.

• Recommends the "golden rule" for public investments, in order to safeguard productivity and the social and ecological base for the well-being of future generations.
• Considers that the developments of the last decade, the challenges linked to grid expansion, the massive increase in energy prices, the danger of cyberattacks, and, last but not least, the war in Ukraine, clearly illustrate what is at stake: namely the question of who, in future, will have control over key infrastructure such as the energy grid. There is therefore primarily a public interest. This would logically entail public ownership that is committed to the common good and eliminates existing inequalities.