Energy, muddled EU plan against utilities high cost: “We will save 260 billion a year”

Brussels – The EU unveiled today (Feb. 26) the Clean Industrial Deal, the 100 billion gospel that brings together competitiveness and decarbonisation, investment and simplification. One of its ribs is the Action Plan for affordable energy, unveiled by EU Energy Commissioner Dan Jørgensen. With this plan Brussels aims to save European households and businesses up to €260 billion a year.

This is a series of short-term measures to reduce a now structurally high utility price, complete the Energy Union, attract more investment in renewables, and be better prepared for potential new energy crises. The figures Jørgensen spewed out at the press conference are astronomical: already in 2025, “we can save €45 billion,” but annual savings are expected to grow to 260 billion in 2040. “If we do the math, from today to 2040, we can save two and a half trillion euros or 1.2 per cent of our GDP,” the EU commissioner said.

The energy crisis triggered by the conflict in Ukraine and Brussels’ determination to free itself from dependence on Russian gas, although receded compared to the winter between 2022 and 2023, continues to accompany—and complicate—the green transition path taken by the European Union under Ursula von der Leyen’s first term. Since 2022, the share of gas from Russia in the EU’s energy mix has dropped from 45 to 14 per cent. The imports are equivalent to the value of “2400 F-35 fighter planes,” Jørgensen said, pointing out how in this way “we indirectly help Putin finance his war.”

But gas “will still be part of our energy mix for some time,” the commissioner conceded again. And the LNG that Europe now buys from the United States and Norway costs at least twice as much as Russian LNG—a bloodletting that goes straight into European citizens’ bills and companies’ production costs. “We are calling for more transparency in the market,” Jørgensen said in this regard. To ensure fair competition, the Commission will step up its monitoring of EU gas markets with the help of the Agency for the Cooperation of Energy Regulators (ACER), the European Securities and Markets Authority (ESMA) and national regulators. In the action plan, the EU pledges to “identify additional cost-competitive imports from reliable suppliers.” Jørgensen suggested using joint gas purchases to “leverage the Union’s purchasing power.”

The solution to increased utility bills remains decarbonisation. And it must be accelerated

However, decarbonisation must continue to run on a parallel track because clean energy sources “have already proven to be cheaper” than fossil fuels. In a speech pronounced today at the European Industry Summit in Antwerp, von der Leyen pointed out that “since the launch of the European Green Deal, we have saved €60 billion in fossil fuel imports thanks to low-cost local renewables.” Concretely, to accelerate the transition, Brussels has chosen to rely on one of the keywords of the new Clean Industrial Deal: “simplification.” Jørgensen has set goals to “reduce in a very considerable way” the processes for implementing projects on renewables: “Authorise within six months projects that are not particularly complex, two years at most for the most complex ones.”

By accelerating investment in clean energy and infrastructure and bringing transparency and fairness to gas markets, “energy can become more affordable,” promises the European Commission. However, Brussels will provide new recommendations to member states to combat expensive utilities at the root, such as “to reduce national electricity taxes and enable consumers to switch more easily to cheaper energy offers.”

Precedence also goes to adopting long-term supply contracts, which help protect consumers and businesses from volatile energy prices, and “support for wider deployment” of energy efficiency solutions, with guaranteed interventions in collaboration with the European Investment Bank. Among the most interesting suggestions in the otherwise muddled EU plan is presenting “programs to reward consumers who reduce consumption at peak times and keep energy bills under control.”