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The European Union has taken a significant step towards ensuring affordable, efficient, and clean energy for its citizens through its newly announced Action Plan for Affordable Energy.
The plan, revealed on February 26, 2025, by European Commission President Ursula von der Leyen, is designed to highlight the true value of the EU’s Energy Union while implementing coordinated measures to lower energy costs, attract investment, and prepare for future energy crises.
Professor Andreas Poullikkas, former Chairman of the Cyprus Energy Regulatory Authority (CERA) and current Professor of Energy Systems at Frederick University, has commented on the initiative.
He explained that the EU’s REPowerEU plan, launched in 2022 to address the energy crisis, had already strengthened the resilience of the European energy system by improving efficiency, increasing clean energy production, and diversifying energy supplies.
By 2024, the installed capacity of wind and solar power had reached 78 gigawatts, while over three million heat pump units had been deployed, contributing to renewable energy generating 48 per cent of the EU’s electricity needs.
However, he emphasised that long-term sustainable solutions required the completion of the Energy Union through three key drivers.
“The EU must establish a fully integrated energy market supported by an interconnected and digitised grid, as well as a unified regulatory framework,” he said.
He further stressed the importance of decarbonising the energy system by expanding clean energy production, enhancing electrification, and prioritising energy efficiency.
“Since natural gas still plays a role in the EU’s energy consumption, we need a more transparent and competitive gas market while continuing efforts to diversify and reduce its usage,” he added.
The new action plan proposes that the EU, its member states, and industry take coordinated steps to reduce energy costs.
This includes new pricing methodologies for network usage fees and the potential introduction of legally binding legislation if necessary.
Poullikkas mentioned that high electricity taxes, such as VAT and other national levies, significantly increase consumer bills.
“Lower taxation on electricity and the removal of non-energy cost components from bills are crucial,” he stressed.
“The EU reminds member states that they can reduce national taxes and levies on electricity bills to the minimum rates allowed under the Energy Taxation Directive,” he added.
The European Commission is also advocating for increased competition in the retail electricity market to lower procurement costs.
It intends to guide member states on removing existing barriers that prevent consumers from saving money by switching suppliers or modifying their electricity contracts.
“Ensuring consumers understand their bills through clear information on energy consumption and pricing will empower them to shift usage to lower-cost hours and participate in renewable energy production,” Poullikkas said.
He underlined the need to decouple retail electricity prices from gas prices, given the volatility of gas markets.
“To achieve this, the EU will provide guidance on long-term electricity supply contracts, particularly for energy-intensive industries, while supporting national schemes and risk-reduction mechanisms,” he added.
A major focus of the action plan is reducing licensing times for new clean energy infrastructure.
Moreover, Poullikkas explained that significant efforts were needed to accelerate permitting processes for network projects, energy storage, grid flexibility systems, and electric vehicle charging points.
“The European Commission plans to introduce legislative proposals to speed up permitting and evaluate current practices for licensing new nuclear energy technologies, such as small modular reactors,” he stated.
Additionally, the EU is prioritising the expansion of its interconnected electricity grid. Poullikkas highlighted the importance of cross-border projects, particularly in offshore electricity networks in the North Sea, Baltic region interconnections, Iberian Peninsula capacity increases, and greater integration between Southeast and Central Europe.
“The benefits of these flagship projects will extend beyond the host countries, and the EU will continue providing adequate funding to support interconnection projects vital to completing the Energy Union,” he said.
Poullikkas also stressed that the EU’s commitment to carbon neutrality and removing obstacles to energy market integration presented a unique opportunity to lower energy prices, enhance security, and position Europe as a leader in clean technologies.
“By planning new energy projects and completing existing ones, the Energy Union can be realised,” he said.
Furthermore, he pointed out that implementing the EU Action Plan for Affordable Energy would require participation from all stakeholders.
“The European Commission must ensure an effective and realistic regulatory framework, member states must collaborate closely, and industry, businesses, innovation bodies, and citizens must actively engage in these efforts,” he concluded.
