‘Energy transitions’ as a concept refers to the process that the energy system is required to undergo in order to meet the challenges posed, in particular, by the manmade greenhouse gases attributable to the energy sector. Therefore, the key focus in the ‘transition’ is lowering the environmental impacts both energy production and energy consumption gives rise to, in particular by increasing the share of renewable energy in the energy mix and improving energy efficiency. Depending whether the focus is global, European or local, energy transition is also envisaged to further several other objectives ranging from improvement of security of energy supply to stimulating different technology innovations. A tool to this end is the boost of clean tech through the support of a sustainable business approach, which includes apart from energy efficiency and carbon mitigation, resource reduction and management, pollution control, end of life strategy and waste reduction.
As energy markets in Europe have traditionally evolved around supply side where (national) monopoly energy companies produce energy from conventional energy sources (fossil fuels), energy transitions require a major shift in the whole ideology underpinning energy production and energy markets.
At the European Union (EU) level, this development is also reflected in the Energy Union, established in 2015 with a view to achieve in a cost-effective way ‘a fundamental transformation of Europe's energy system’. The basic pillars of the Energy Union are built upon ‘five mutually-reinforcing and closely interrelated dimensions designed to bring greater energy security, sustainability and competitiveness’. These dimensions are: (1) energy security, solidarity and trust; (2) a fully integrated European energy market; (3) energy efficiency contributing to moderation of demand; (4) decarbonising the economy; and (4) research, innovation and competitiveness.
What should not in any case be neglected is that at the centre of this transition are consumers. According to the Energy Union Strategy, ‘our vision is of an Energy Union with citizens at its core, where citizens take ownership of the energy transition, benefit from new technologies to reduce their bills, participate actively in the market, and where vulnerable consumers are protected’.
All of the changes adopted at the policy level naturally resonate to the regulatory framework.