Scaling up renewable electricity sources across the EU could reduce electricity generation costs, improve energy independence, and support the transition towards clean industry, according to a European Environment Agency (EEA) report published this week. At the same time, accelerating the electrification of heating, transport and industry is needed to support Europe’s clean and competitive future.
Renewables and electrification: key to cutting costs and powering EU’s clean industry and competitiveness
The EEA report ‘Renewables, electrification and flexibility — for a competitive EU energy system transformation by 2030’ finds that the European Union has already demonstrated its ability to shift away from fossil fuels, with electricity-sector CO2 emissions dropping significantly over recent decades. In comparison, progress in decarbonising heating and transport, where gas and oil consumption dominate, is slower.
In 2022, higher gas prices doubled the EU energy import bill, bringing it up to 4% of GDP. The report underscores that renewables, particularly solar and wind, offer a sustainable path toward increased energy independence.
By investing in domestic renewable electricity generation, alongside stronger efforts to improve energy and resource efficiency, Member States can replace volatile fossil fuel imports with available, lower-cost and cleaner energy sources.
Costs savings for electricity generation
A forward-looking analysis of the European grid finds that variable electricity generation costs in the EU could fall by up to 57% compared with 2023 levels, if EU 2030 benchmarks for renewables and energy efficiency are met. In the long term, this can translate into lower consumer prices, while in the shorter term, the savings are likely to be at least partially offset by investment needs for a more flexible European grid and other national expenses. In this respect, the report’s findings point to renewables and electrification as a pathway towards greater energy independence in Europe and towards maintaining sustainable energy prices, by counteracting the price-setting influence of imported gas.
To reap the benefits, the report identifies three urgent priorities:
- Unlocking capital for renewables: Electric capacity from renewables must rise to 77% of total installed capacity by 2030 (compared with over 50% today). Attractive fiscal and regulatory frameworks could support an increased level of near-term investment.
- Doubling system flexibility: Smart, inter-connected grids, demand response and storage solutions must scale up rapidly to maintain the energy system constantly in balance.
- Boosting EU-wide coordination: Cross-border cooperation on infrastructure and planning is essential to balance regional disparities, reduce inefficiencies and maximise the resilience of Europe’s energy system.
Need for a targeted, sectoral approach
Electrification of home heating and industry, powered by heat pumps and deep renovation of inefficient buildings, will be vital to phase out fossil fuels already in the short term. In industry, predictability under the EU Emissions Trading System — the main economic instrument addressing emissions from this sector will incentivise further emission reductions. In transport, accelerating the adoption of electric vehicles — combined with infrastructure for walking, cycling and collective transport — will drive both decarbonisation and consumer savings.
The report also encourages Member States to coordinate policy and technology efforts. This will require aligning taxation and pricing signals across the whole energy system and phasing out fossil fuel subsidies, which reached record levels in 2022–2023. Turning around the stagnating electrification trend by 2030 requires clearer economic signals from across the whole energy system. Guiding private consumers’ decisions regarding buildings and transport are likely to require more comprehensive policy packages, in addition to price signals.
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Energy in Demand - Sustainable Energy - Rod Janssen 
As I read through the report I was reminded of the SovU in the 1970s and
1980s. The report follows “the party line” in most areas. Utterly
unoriginal & fails to get to grips with core problems. These include a
failure to get to grips with the need for large-scale storage as
renewables expand, surplus grow rapidly and wholesale prices collapse.
Wholesale prices collapse because the EU institutions have
comprehensively failed to implement electricity market reform that
prices genration @ cost. Instead the people in DG ENER and other
institutions continue to claim that marginal markets remain the answer.
The construction of lots more infrastructure is offered instead of
storage, whilst the reality that urban and sub-urban networks can never
support a combo of heat pumps and EV charging is ignored. Both EU
industry and EU citizens pay heavily for the myriad failings of EU
institutions who are for the most part not only out of touch but out of
their minds/living in fantasy land. On Wedensday @ the Eurometaux
conference, the President of the association accused the EU intitutions
of a total avoidance of any responsibility for failure – which is writ
large on electricity pricing. Personally? until elec prices are
reformed, I’m sticking with gas for heating – & I don’t give a stuff
about CO2 emissions, if the Commission does not want to act seriously,
well two can play that game. And for the avoidance of doubt – there are
plenty in the Commission that think the upper echelons live in fantasy
land much of the time. The report (stick to the party line) reflects this.