Brussels, 11 September 2024
Today, the Commission has published theState of the Energy Union Report 2024which describes howthe EU has managed unprecedented challenges in the energy policy landscape during this Commission’s mandate,equipping the EU with a regulatory framework forpursuing the clean energy transitionand laying thefoundations for renewed economic growth and competitiveness.
Crucially, over the past years, the EU has managed to withstand critical risks to its security of energy supply, regain control over the energy market and prices, and accelerate the transition towards climate neutrality:
- Renewable energy generation is breaking new capacity records. In the first half of 2024, half of the EU’s electricity generation came from renewable sources.
- The share of Russian gas in EU imports dropped from 45% in 2021 to 18% by June 2024, while imports from trusted partners like Norway and the US have increased.
- We reduced gas demand between August 2022 and May 2024 by 138 billion cubic meters.
- The EU reached its 90% winter gas storage target on 19 August 2024, well ahead of the 1 November deadline.
- Energy prices are morestable and remain significantly below the peak levels of the energy crisis of 2022.
- The EU’s greenhouse gas emissions fell by 32.5% from 1990 to 2022, while the EU economy has grown by around 67% in the same period.
- At international level, the EU led the global initiative to triple renewable energy capacity and double energy efficiency improvements as part of the transition away from fossil fuels, which was endorsed by all Parties at COP28 in Dubai.
Significant progress has been made onrenewable energy. Wind power overtook gas to become the EU’s second largest source of electricity behind nuclear, and by the first half of 2024 renewables generated 50% of electricity in the EU. In 2022 the EU’sprimary energy consumption renewed its downward trend, falling by 4.1%. Nevertheless, energy efficiency efforts will need to be stepped up further for the EU to meet the 11.7% final energy consumption reduction target by 2030. Further improvement is needed, not least in the electrification of heating equipment across the board and the rate of renovation of buildings. Strengthened efforts are needed to address highenergy prices.This is key to improve the competitiveness of EU industry, and to accelerate investments in Europe’s integrated infrastructure networks, which are essential for the electrification of the European economy.
The report recalls that allMember States must submit their final updated National Energy and Climate Plans as soon as possible, to ensure collective achievement of the 2030 energy and climate goals. The assessment of the draft updated NECPs published in December 2023 shows that Member States have takena step in the right direction, but this isnot yet sufficientto reduce net greenhouse gas emissions by at least 55% by 2030 and they need to take into account the Commission’s recommendations for their final Plans. Today, the Commission also publisheda report on the functioning of the Regulation on the Governance of the Energy Union and Climate Action, which concludes that the regulation is playing an important role in keeping the EU on track to meet its 2030 targets by making planning and reporting more coherent, integrated, and simpler.
New and emerging challengeswill need to be addressed in the future, such as the current ambition gap in renewables and energy efficiency targets, the increase of energy poverty, the energy price differential compared to other global competitors, and the risk of new strategic critical dependencies. They will require adecisive policy responseand astep change in efforts at EU and Member State level, throughmore coordination, market integration and joint action.
The EU hascontinued to stand by Ukrainein the face of relentless Russian attacks on its energy system. The synchronisation of the Ukrainian and Moldovan grids with the Continental European Network helped stabilise Ukraine’s electricity system and the capacity for electricity exchanges has now reached 1.7 GW for commercial trade. It also enables Ukraine to benefit from emergency imports. By 31 July 2024, over 40% of all donations from Member States were dedicated to the energy sector, with the Union Civil Protection Mechanism’s total contribution estimated at over €900 million. The Ukraine Energy Support Fund (UESF) also mobilised over €500 million by June 2024. In addition, the EU’s €50 billion Ukraine Facility will provide consistent funding to aid Ukraine’s recovery and sustainable economic growth up to 2027.
Enhancing energy security and competitiveness
EU manufacturers face growing competitionin net-zero technologies on global and domestic markets. The Report recalls the importance of theNet-Zero Industry Actand theCritical Raw Materials Act, alongside the reform of the Electricity Market Design to face these challenges. Today’s report also recognises theneed to build on partnerships with industryto accelerate the development of net-zero technologies and strengthen the EU’s manufacturing base. Industrial alliances such as the European Battery Alliance, European Clean Hydrogen Alliance, Solar PV Industry Alliance, Renewable and Low-Carbon Fuels value chain Industrial Alliance and Alliance on Small Modular Reactors will play an important role. The Commission’s clean transition dialogues with industry and social partners will support the implementation of the European Green Deal.
TheInnovation Fund, with its estimated budget of around €40 billion until 2030, also plays a crucial role. TheEuropean Hydrogen Bank, financed from the EU ETS Innovation Fund, is up and running and has conducted a first successful round of EU auctions awarding nearly €720 million to 7 renewable hydrogen projects in Europe.
Empowering consumers in the clean transition
With new energy market legislation, such as the reformed Electricity Market Design,the most vulnerable will be better protectedfrom disconnection. In case of a natural gas price crisis, Member States can introduce measures to protect consumers and ensure access to affordable energy and essential social services. This includes through interventions on price settings at retail level to shield consumers from excessively high prices.
TheSocial Climate Fundwill also be a key instrument, to mobilise at least €86.7 billion for 2026-2032, financed from ETS revenues and at least 25% Member State co-funding. The Fund will support structural measures and investments in energy efficiency renovations, access to affordable and energy-efficient housing, clean heating and cooling and integration of renewable energy as well as in zero- and low-emission mobility and transport. There is also an option to provide temporary direct income support.
Background
This report is published each year to take stock of the EU’s progress towards the objectives of the Energy Union. Followinglast year State of the Energy Union reportdealing with the challenges and achievements in 2020-2023, this year’s report gives an update on how the EU successfully acted on unprecedented developments and challenges in the last year of this Commission’s mandate.
The first part of the report shows how the high energy and climate ambition under theEuropean Green Dealprovided the basis for the EU’s crisis response strategy and theREPowerEU Plan. It also outlines steps to enhance the competitiveness of European industry. The second part analyses the state of play in the implementation of the Energy Union in all its five dimensions: (1) security, solidarity and trust; (2) a fully integrated internal energy market; (3) energy efficiency; (4) climate action and decarbonising the economy; and (5) research, innovation and competitiveness. This year’s report is accompanied by an annex containing information on voluntary and national schemes on bioenergy in the Member States.
For More Information
- State of the Energy Union Report 2024
- Factsheet State of the Energy Union Report 2024
- Annex on bioenergy
- State of the Energy Union 2024 – Country fiches
- State of the Energy Union Report webpage (with full set of documents and reports)
- Report on the functioning of the Regulation on the Governance of the Energy Union and Climate Action
- Energy Union webpage
- REPowerEU Plan
- National Energy and Climate Plans (NECPs)
- Delivering the European Green Deal
Quote(s)
While we keep living in turbulent times and we have challenges ahead, today’s report shows the unprecedented progress we have made in this mandate to strengthen our Energy Union. Emissions are falling, and renewables play a prominent role in our energy system today. We should swiftly implement the new policy and regulatory framework to address the elevated energy prices, and accelerate development of infrastructure. We will also bring the lesson learned on overdependency on one supplier with us and continue with our project of joint purchasing expanded to new commodities as ensuring industrial competitiveness will be key for the EU’s future economic success.
Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight
This year’s report shows that we are no longer at the mercy of Putin’s pipelines, and we keep standing by our Ukrainian partners as winter approaches. The report highlights the progress we have made under this mandate towards a secure, competitive, and affordable energy sector in the EU. The EU is well equipped to navigate the profound changes and challenges that lie ahead and deliver on its commitments towards the planet and its citizens. Our Energy Union is stronger and greener than ever before.
Kadri Simson, Commissioner for Energy
Source – EU Commission
Remarks by Commissioner Simson at the press conference on the State of the Energy Union Report 2024
Brussels, 11 September 2024
[…] Let me now come to the 2024 State of the Energy Union Report.
Like every year, the Report gives a snapshot of the actions taken and the progress made by Europe in its energy transition.
Today’s report really is a testament to the massive overhaul of EU energy policy we have done over the past five years.
During this mandate we have laid out a comprehensive legal framework to drive the energy sector towards a decarbonised future.
And we have seen changes on the ground, all over Europe, not just changes in the corridors of Brussels and the statute books of our Member States.
The EU is now well equipped to meet its climate neutrality goal while making sure that industry stays competitive.
We have agreed new and higher targets for renewables and energy efficiency.
We have reformed the energy markets and we have also set out the world’s most advanced frameworks for a hydrogen economy and for reducing methane emissions.
Following two record years for renewables installations, in the first half of 2024 wind and solar have risen to new highs, overtaking for the first time ever fossil fuels in our electricity mix.
This commitment at home gives us also the credibility to lead international efforts for renewables. And we see that when we take action, others follow suit.
At COP28, the EU announced the Global Pledge on tripling renewable energy capacity and doubling the rate of energy efficiency improvements by 2030. This pledge became part of the final agreement at COP, meaning all the Parties to the Paris agreement have endorsed it.
The EU’s post-Covid recovery plan has also been key to ensure Member States have access to the necessary funding for their clean transition plans.
Green investments have reached a record level thanks also to national Recovery and Resilience Plans. By mid-June this year, out of the EUR 240 billion disbursed as part of National Recovery and Resilience Plans, EUR 184 billion have been allocated to energy related reforms and investments.
Market integration and grid and infrastructure development has also been key to ensure renewables expansion.
I am particularly proud that this mandate has seen the virtual completion of the Baltic States energy markets synchronisation with the Continental Electricity Network. And we have made major steps forward with our Projects of Common Interest, and rapid adjustment of our gas infrastructure to support the changing import patterns since Russia’s invasion of Ukraine.
Let’s not forget that everything I have just described has taken place amidst a global pandemic and a historic energy crisis for Europe. Unity and solidarity have allowed us to turn a crisis into an opportunity.
Together we have managed to put an end to decades of dependency on Russian fossil fuels.
We used to import 150 billion cubic meters of gas from Russia every year, and it is now less than 50.
Our dependency from Russia dropped from 45% in 2021 to 15% last year.
As we are looking ahead to the next winter, EU gas storage has reached the 90% filling target on 19 August, weeks ahead of the 1 November legislative deadline.
Europeans also decreased their gas consumption by 18% between 2022 and 2024, which also is more than the goal we initially set to ourselves.
So, we have made impressive progress in the past five years, but it is the next five that are really critical to our clean energy transition, to our fulfilment of the Paris Agreement commitments, and to the prosperity of our citizens and the competitiveness of our industry.
To begin with, we need to focus on implementation and complete what we started.
And that is why I really urge Member States to deliver their missing National Energy and Climate Plans. To date, we have only received 10 final plans. And we are now way past the deadline.
These plans are essential to turn commitments into action, and to give certainty to investors.
The other area where more work is still needed is REPowerEU.
We remain fully committed to completing the phase out of Russian gas, which can be done without challenging Europe’s energy security of supply. As a first step, together with the Member States we have been preparing for the end of the gas transit agreement via Ukraine. We have done that already for several months. We started preparing two years ago. The EU is ready to live without this Russian gas coming from the Ukrainian transit route.
In other areas, Europe will need to be more ambitious and bolder, acting more together.
Energy prices still remain too high as the Letta and Draghi reports recalled. These prices weigh on our citizens and on our energy intensive companies, and have an impact on Europe’s international competitiveness, especially vis-à-vis China and the US.
We have done a lot in this mandate to bring down prices from the peak in 2022, but we need now to address structural issues. I believe that the main route is to further increase the pace of deployment of renewables. We see the first signs in 2024 that the pace of renewables deployment is not increasing as fast as it should. We need another strong push to arrive at 42.5% as agreed, by 2030.
Finally, we need a greater boost to infrastructure and grids development, in particular to support electrification. This is an area that needs considerable additional investment, as the Draghi report noted, and is key for market integration and renewables deployment.
And we continue to import too much fossil fuels. Europe needs to rely on more domestically produced clean energy, and import less fossil fuels, to ensure competitiveness, security of supply and the EU’s energy sovereignty and economic resilience.
Dear journalists,
While looking at the progress and challenges for our Energy Union, we can’t forget the terrible situation of our Ukrainian friends.
Due to relentless Russian attacks on energy infrastructure, the country has lost almost half of its power generation capacity. People will be in the cold and dark in the coming months if we do not step up our support.
We have provided a lot of support already, focusing on repairs, distribution of generators and increasing electricity imports from the EU.
But we cannot and will not step back now.
I have set out in an article published in August what needs to be done for Ukraine.
Through the Energy Community Ukraine Energy Support Fund the Commission, Member States and other donors have mobilized around 510 million euro for repairs to damaged installations, decentralized gas and renewable power production and back-up power supply to civilian infrastructure.
The Commission stands ready to do more and increase its contribution.
And of course, we work with ENTSO-E to increase the maximum capacity for electricity exports to Ukraine.
All these efforts must be stepped up as the winter is approaching, to avoid the worst.
Supporting Ukraine through the winter and ensuring secure and affordable supplies to Europe will remain my top priorities in the closing months of my mandate as Energy Commissioner.
And let me say how proud I am of leaving behind me an Energy Union that is stronger and greener than ever before.
Thank you.
Source – EU Commission