The EU is at a strategic moment, where it needs to guarantee its security of supply, diversify energy resources while accelerating its decarbonisation efforts. This will only be possible provided massive investments are redirected towards renewables, electrification and energy savings, as well as with the necessary regulatory support.
The European Commission estimates that the REPowerEU Plan will require additional investments of €210 billion euro between now and 2027, on top of the ones needed to meet the objectives of the Fit for 55. In all our sectors, these investment needs have been clearly identified and must be quickly addressed to ensure a successful energy transition for the EU:
- Renewable energy: to meet the REPowerEU targets, €86bn investment is needed for solar and wind between now and 2027.
- Grid: an additional €29 bn of additional investments are needed in the power grid by 2030, to make it fit for increased use and production of electricity.
- Electrification: Direct electrification of industrial processes will need to reach 37% in 2030 and 46% in 2050 in order to achieve carbon neutrality by 2050. Electrification-related investments must increase accordingly from €5bn year to €17bn year.
- Heat pumps: the EU must double the current roll-out rate of heat pumps, resulting in a cumulative 10 million units over the next 5 years, requiring a total investment of €56bn.
- EV charging: by 2030 a total amount of up to €280bn will need to be invested in installing public and private charging points, upgrading the power grid, and building capacity for renewable energy production. For public charging infrastructure, this amounts to €8bn annually.
- Energy efficiency: the estimated funding gap for energy efficiency investments in the EU over the next decade is €185 billion per year (figures before the crisis).
- BACS: annual investment needs in BACS would peak at €7.4 bn resulting in annual energy bill savings of €32 bn (without considering the ongoing revision of the Energy Performance of Buildings Directive).
- Batteries: The total level of investments along the battery value chain amounted to €127 billion by 2021. Additional investment of some €382 billion is expected to create a self-sufficient battery industry by 2030.
In this context, all investments matter and the EU Taxonomy will be instrumental to ramp up needed capital flows towards these activities, to support the twofold challenge of EU’s energy and climate security.
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