Despite difficult challenges in the energy policy landscape, the EU made progress towards a more secure and affordable energy sector, less dependent on Russian energy, an annual EU energy report showed Wednesday.
The European Commission’s State of the Energy Union Report 2024 details how 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.
- Europe 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 more stable 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.
On renewable 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’s primary 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.
To ensure collective achievement of the 2030 energy and climate goals, EU efforts are not yet sufficient to 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.
New challenges will need to be addressed in the future, says the report, 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.
The EU continues to stand by Ukraine in 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.
On enhancing energy security and competitiveness, the report shows EU manufacturers facing growing competition in net-zero technologies on global and domestic markets. The report recognises the need to build on partnerships with industry to 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 Innovation Fund, with its estimated budget of around €40 billion until 2030, also plays a crucial role. The European 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.
New energy market legislation, such as the reformed Electricity Market Design, helps to protect the most vulnerable from 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.
The Social Climate Fund is recognised as a key instrument, mobilising 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.
State of the Energy Union Report 2024
Factsheet State of the Energy Union Report 2024
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
