What does the EU need to make energy more affordable?

On 21 February, 2025, the Electrification Alliance presented key recommendations to the European Commission for shaping the Affordable Energy Action Plan. They advocate for smart, clean, and direct electrification as the most efficient path to decarbonisation, accelerating renewable energy adoption, optimising grid investments, and ensuring network stability through consumer flexibility. Accelerating the rollout of clean electricity is essential, as renewable energy has already generated substantial cost savings. Effective implementation of the updated Renewable Energy Directive (RED) and a robust framework for grid operators are key to ensuring the seamless integration of clean power.

The Alliance also emphasises the importance of non-fossil flexibility solutions such as demand response, storage, vehicle-to-grid technology, and electricity interconnectors. A more intelligent energy system can lower costs and improve renewable integration, and Member States must implement policies to unlock flexibility from decentralised energy resources. Supporting industrial decarbonisation through clean electrification is another priority, requiring targeted financial aid and mechanisms like Power Purchase Agreements (PPAs) to help energy-intensive industries remain competitive.

To enhance affordability, the Alliance urges fair electricity taxation, noting that electricity is currently taxed 1.4 times more than fossil fuels in Europe. They propose lowering electricity excise duties, removing unrelated levies, and de-risking investments in clean energy through financing options such as European Investment Bank-backed guarantees. These measures will help Europe remain a competitive investment hub, support industrial growth, and provide affordable electricity, ensuring the EU stays on track towards its net-zero goal.

Notes

• Since 2017, the Electrification Alliance gathers E-Mobility Europe, Eurelectric, the European Climate Foundation, the European Copper Institute, the European Heat Pump Association, EuropeOn (electrical contractors), smartEn, SolarPower Europe, the Renewables Grid Initiative, and WindEurope, who collectively call for electricity to be recognised as the key energy carrier for an efficient and decarbonised European future.

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