EU Plan for Reducing Energy Bills

Towards a More Efficient and Sustainable Energy Union

The European Commission has recently presented an ambitious action plan aimed at reducing energy costs for households and businesses, completing the Energy Union and increasing Europe’s resilience in the face of potential energy crises. The plan, closely linked to the Clean Industrial Deal, promises overall savings of €260 billion by 2040, with an initial target of €45 billion already in 2025 and €130 billion by 2030.

The main objective of the plan is to address the structural issues that determine the increase in energy costs in Europe. These include the dependence on imported fossil fuels and the incomplete integration of the European electricity system. The Commission proposes to accelerate the granting of permits for renewable energy and energy infrastructure, thus reducing production costs and strengthening security of supply. Currently, European consumers already benefit from savings of around €34 billion per year thanks to the internal energy market. Greater energy integration is expected to increase these benefits to €40-43 billion annually by 2030. The European Commission has identified three key components for action to make energy more affordable:

Network and system costs

Taxes and charges

Supply costs

Concrete proposals include recommendations to Member States to reduce electricity taxes and make it easier for consumers to switch to suppliers with more advantageous tariffs. In addition, the Commission will encourage the conclusion of long-term supply contracts, thus reducing the link between retail electricity prices and gas price fluctuations. Another key intervention concerns the methodology for calculating network charges, so that they truly reflect the costs of the energy system, incentivising more efficient use of existing infrastructure.

One of the pillars of the plan is energy efficiency, seen as a key element for reducing costs in the long term. The large-scale adoption of energy-saving solutions could generate up to €162 billion in savings per year by 2030. To encourage this process, the Commission intends to work with the European Investment Bank to develop a guarantee scheme to reduce the risks of investments in the energy sector. Special attention will be paid to promoting more efficient appliances and products, with a longer lifespan, to ensure concrete benefits for consumers.

A key aspect is the reduction of gas costs, which currently significantly affect the competitiveness of European industries. The Commission will strengthen the monitoring of EU gas markets through regulatory bodies such as ACER and ESMA, and will engage in the search for reliable and competitive suppliers of liquefied natural gas (LNG). In addition, the EU aims to leverage its purchasing power by aggregating demand from European companies to obtain more favourable conditions on international markets. To complete the Energy Union, the Commission plans to invest in interconnectors and a more robust electricity grid, facilitating cross-border trade and reducing disparities between Member States.

At the same time, initiatives will be promoted to support the electrification and decarbonisation of the heating and cooling sectors. The digitalisation of the energy system will be another key element to improve the overall efficiency of the network. As highlighted by Energy and Housing Commissioner Dan Jorgensen, the current energy context requires bold and timely action. The Commission’s plan represents an ambitious strategy to ensure cleaner, cheaper and more efficient energy, without sacrificing security of supply The European Union thus confirms its commitment to the energy transition, balancing the need to reduce costs for families and businesses with that of accelerating the transition to a sustainable energy system independent of fossil fuels. The challenge now will be to implement the proposed measures, sharpening regulatory tools and investing in future technologies for more accessible and secure energy for all. It will be very important to collaborate to solve the long-standing problem of high bills

Alessandro Fiorentino