In a provisional version of its plan for affordable energy prices, obtained by Agence Europe, the European Commission sets out in detail how it intends to build a “genuine Energy Union” to deliver a structural reduction in energy prices in the EU. The Commission will present the final version of this action plan on 26 February, alongside its ‘Clean Industrial Deal’ aimed at boosting European competitiveness (see other news).
Lower energy costs. In order to bring down consumer bills directly, the Commission is committed to putting forward, in the second quarter of 2025, a design of tariff methodologies for network charges to incentivise the use of flexibility “while maintaining the incentive to invest in the grid and the level playing field”. A legislative proposal could be put forward to make it legally binding, if deemed necessary.
The Commission then calls on the EU Council to finalise the adoption of the Energy Taxation Directive (see EUROPE 13564/11). It will also present additional recommendations to Member States later this year on how to lower electricity taxation levels for industry and households.
Pilot programme for PPAs. The Commission is also encouraging the decoupling of electricity bills from high and volatile gas prices by allowing long-term contracts, particularly for energy-intensive industries.
It will therefore be launching a pilot programme with the European Investment Bank (EIB) for Power Purchase Agreements (PPAs) for businesses, for an amount yet to be announced. Coordination with the EIB is expected to take place in the second quarter of 2025, and guidance for Member States to enable combining PPAs and contracts for difference (CfDs) is expected by 2026.
Accelerated permitting. The European Commission then undertakes to support EU countries in speeding up permitting procedures for new clean energy supply. In particular, it will put forward legislative proposals in mid-2025 on accelerating permitting for grids, storage and renewables.
It also undertakes to assess the streamlining of licensing practices for new nuclear technologies and to publish a communication on small modular reactors (SMRs) in 2026.
European package for grids. Building on the 2023 Grid Action Plan, the Commission will put forward a European Grid Package by the first quarter of 2026.
Secondly, the document calls on Member States to quickly implement EU rules on market access for storage and demand response and to remove national barriers. The Commission’s revised state aid framework is expected by the second quarter of 2025, while the new rules on demand response are expected by the first quarter of 2026.
Gas markets. In order to ensure “fair competition” in gas markets, the Commission will set up a specific task force to scrutinise the EU natural gas markets, learning from the lessons of the energy crisis. This task force will provide recommendations by the fourth quarter of 2025.
In the first half of the year, the Commission will propose, among other things, demand aggregation for EU companies entering contracts with liquefied natural gas (LNG) plants worldwide and LNG supply option contracts with “trusted” LNG producers.
Energy Union Task Force. In its drive to achieve a genuine Energy Union, the Commission lists another series of measures to come in 2025, such as the setting up of an Energy Union Task Force consisting of high-level representatives from the Commission, relevant EU bodies and stakeholders. It will also publish a Clean Energy Investment Strategy and an updated Nuclear Illustrative Programme (PINC).
By mid-2027, the Commission will also present an Electrification Action Plan, a Strategic Roadmap for Digitalisation and a Heating and Cooling Strategy.
A legislative proposal for a revision of the current EU energy security regulatory framework is planned for early 2026.
Anticipating future crises. To guard against potential future energy crises, the Commission believes that it is now possible to design and activate schemes to reduce peak demand, under which consumers are paid by their supplier to reduce their consumption at certain times, “also outside of crisis periods”.
Under certain conditions, it also considers that close cooperation with transmission system operators (TSOs) and national regulatory authorities is necessary to temporarily increase available cross-border interconnection capacities.
To see the draft document: https://aeur.eu/f/fk5 (Original version in French by Pauline Denys with Anne Damiani)