EU responds effectively to energy crisis, looks to the future, accelerates the green transition

While the worst effects of the energy crisis may now be behind us, the European Commission report highlights that there is no room for complacency.

The EU responded collectively and effectively to the energy crisis caused by Russia's aggression in Ukraine and weaponization of its energy supplies, by accelerating the clean energy transition, diversifying supplies and saving energy. Adobe Stock photo by Chirapriya.

This article was published by the European Commission on Oct. 24, 2023.

In the State of the Energy Union Report 2023, the European Commission looks back on the EU response to the unprecedented energy crisis of the past two years, assesses the state of play with the green transition at national, European and global level, and sets out the challenges and opportunities ahead as Europe pursues its ambitious climate and energy goals for 2030 and 2050.

The Report shows how the EU responded collectively and effectively to Russia’s aggression in Ukraine and weaponization of its energy supplies, by accelerating the clean energy transition, diversifying supplies and saving energy. The REPowerEU Plan and a series of emergency legislative measures ensured that Europe avoided energy supply disruptions, eased pressure on energy markets, prices and consumers, and pursued the structural reform of our energy system. This was done through the European Green Deal legislation and through increased deployment of renewable energy and improving energy efficiency. The EU is also on track to deliver on its REPowerEU targets. Ahead of the winter 2023-2024, the EU is better prepared to ensure its energy security, thanks to well-coordinated actions to fill gas storages, diversifying energy import routes and infrastructure, investments in renewable energy and energy efficiency, and collective efforts to reduce energy demand.

Key figures on the State of the Energy Union:

  • The EU’s net greenhouse gas emissions decreased by around 3 per cent in 2022, reaching a reduction of 32.5 per cent compared to 1990 levels;
  • The EU drastically reduced its dependence on Russian fossil fuel: phasing out coal imports; reducing oil imports by 90 per cent; reducing gas imports from 155bcm in 2021 to around 80 bcm in 2022 and to an estimated 40-45 bcm in 2023;
  • The EU reduced gas demand by more than 18 per cent compared with the previous five years, saving around 53 bcm of gas;
  • Gas storage facilities were filled to 95 per cent of capacity ahead of the winter of 2022-2023 and stand at over 98 per cent full today, ahead of the coming winter;
  • The EU Energy Platform organized three rounds of joint purchase of gas, collecting 44.75bcm of demand and matching it with 52bcm of supply offers;
  • 2022 was a record year for new solar photovoltaic (PV) capacity (+41 GW), which is 60 per cent more than in 2021 (+26 GW). New onshore and offshore wind capacity was 45 per cent higher than in 2021;
  • In 2022, 39 per cent of electricity was generated by renewables, and in May wind and solar surpassed fossil fuels for the first time in EU electricity generation;
  • Legislative targets were agreed for a minimum share of 42.5 per cent of renewable energy in the EU by 2030, and the ambition to reach 45 per cent. Energy efficiency targets were also increased, to reduce final energy consumption by 11.7 per cent by 2030.

Future challenges and opportunities

While the worst effects of the energy crisis may now be behind us, the Report highlights that there is no room for complacency. The EU needs to continue to ensure affordable, reliable, and accessible energy for households and to enhance the industrial and economic competitiveness of its industry, supporting investments in clean technologies.

While gas prices peaked in August 2022 at €294/MWh, they fell to an average of €44/MWh from January to June 2023. Electricity prices peaked at €474/MWh in August 2022 and fell to average of €107/MWh from January to June 2023. The Commission continues to pay close attention to energy prices for citizens and industry, and has published a recommendation on energy poverty and facilitated a joint declaration on enhanced consumer protection among key stakeholders in the energy sector.

With a strong EU legislative framework now largely in place, Member States need to implement their shared commitments, and the National Energy and Climate Plans (NECPs) are a key tool for planning and tracking this process. This year’s Report presents the first assessment of the Progress Reports submitted by Member States on their 2019 National Energy and Climate Plans, which is crucial to take stock of where the EU stands in delivering its climate and energy ambitions. The Commission is still waiting for several Member States to submit their updated NECPs to allow a thorough assessment by the end of this year of whether or not we are on track for achieving our revised 2030 targets, and what measures would be needed to address any shortfalls.

Already now, we can see that we need to significantly accelerate our actions. The share of renewable energy in gross final energy consumption reached 21.8 per cent in 2021. With an average yearly increase of 0.67 percentage points since 2010, reaching the new 2030 EU target of 42.5 per cent will require a much faster growth in the coming years. Greenhouse gas emissions continue to fall steadily each year, but the pace needs to pick up, and almost triple the annual reductions, to meet our 2030 targets.

The State of the Energy Union Report highlights the importance of boosting the EU’s competitiveness and industrial leadership in the new global energy context, and of concluding legislation on the Electricity Market DesignNet-Zero Industry Act and Critical Raw Materials Act in particular. These proposals will complement the ‘Fit for 55′ legislation and support the development of clean energy sources, grids and stable markets across Europe. The recently-launched clean transition dialogues with industry will be an important tool for implementing legislation and identifying and addressing bottlenecks such as investment barriers or skills shortages. The Commission will also work with Member States to pursue the phase out of fossil fuel subsidies as soon as possible, which remain a major obstacle to the clean energy transition and a drag on our climate objectives.

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