The EU faces a pivotal moment in enhancing competitiveness, decarbonisation, and security, necessitating decisive action. High energy costs strain citizens and businesses, highlighting the EUs crucial role in addressing these issues. The Commission introduces an Action Plan with measures to reduce energy costs, finalize the Energy Union, boost investments, and prepare for energy crises. As part of the Clean Industrial Deal, this plan aims to alleviate high energy bills for households and production costs for industries, forecasting savings of €45 billion in 2025, €130 billion annually by 2030, and €260 billion by 2040.
The plan offers immediate consumer relief and advances the Energy Union by leveraging renewable energy, energy savings, market integration, and interconnections. It addresses structural challenges inflating EU energy costs, like fossil fuel reliance and electricity system integration. Building on recent electricity market reforms and the REPowerEU Plan, it incorporates sector-specific strategies for wind, solar, and grids and updates energy and climate laws under the Fit for 55 package.
By accelerating clean energy and infrastructure investments and enhancing transparency in gas markets, energy affordability increases. Reducing permitting times for renewables will also lower production costs. Consumers already benefit from the EUs internal energy market, saving around €34 billion annually, with potential increases to €40-43 billion per year by 2030.
President Ursula von der Leyen stated: Were lowering energy prices and boosting competitiveness. Weve reduced energy costs in Europe by enhancing renewables. Now, with the Affordable Energy Action Plan, part of our Clean Industrial Deal, we aim for predictable prices, stronger European connections, and increased energy offtake, systematically removing obstacles to build a true Energy Union.
Reducing energy costs to provide immediate consumer relief while completing the Energy Union
To make electricity affordable, the Commission will address energy bill components: network/system costs, taxes/levies, and supply costs. Recommendations will guide Member States to reduce electricity taxes and facilitate consumer supplier-switching for cheaper offers. The Commission will support long-term supply contracts to unlink retail electricity bills from volatile gas prices. Proposals will ensure network charges reflect system costs, promoting grid efficiency.
Support for renewable adoption and energy efficiency solutions will benefit consumers, potentially saving up to €162 billion annually by 2030. An EU guarantee scheme, in partnership with the European Investment Bank, will mitigate investment risks in energy efficiency services, enhancing access to efficient appliances and products.
High EU gas prices hinder European industry competitiveness. To ensure fair competition, the Commission will intensify EU gas market scrutiny with ACER, ESMA, and national regulators, engage with reliable LNG suppliers for cost-competitive imports, and leverage the Unions purchasing power by aggregating demand from EU companies.
Ultimately, integrated, functional, and decarbonised energy markets best shield against price volatility. Thus, the Commission aims to complete the Energy Union, strengthening grids and cross-border trading, boosting electrification and heating/cooling sector decarbonisation, mobilising private capital, and digitalising the energy system.
Preparing for potential crises
Supply security is essential for stable prices. The Commission will update the EU energy security framework to counter threats like cyber-attacks, infrastructure sabotage, and import dependency risks. It will enhance crisis preparedness, advising Member States on consumer incentives to reduce peak-time consumption and manage energy bills.
For more information
Questions and Answers on the Action Plan for Affordable Energy
Factsheet on the Action Plan for Affordable Energy