By Anthi Charalambous
At a time of high energy volatility, the European Commission has presented its new Action Plan for Affordable Energy, seeking to reduce energy costs, enhance security of supply and accelerate the green transition.
The Action Plan comes at a critical juncture, shortly after prolonged blackouts in Spain and France highlighted the vulnerability of European grids.
The EU is at a crucial turning point for its competitiveness, decarbonisation and security, with a clear need to act. Structurally high energy costs are affecting citizens and businesses.
The EU’s triple energy challenge can be summarised as follows:
- 46 mln Europeans face energy poverty;
- Prices for industries remain 97% higher than the 2014-2020 average;
- Europe remains dependent on fossil fuel imports, with all the geopolitical and economic uncertainty this entails.
Linking energy policy to the World Environment Day, marked on June 5, underlines the need for integrated and sustainable solutions that address both energy and environmental challenges.
Promoting demand management and flexibility, using smart technologies and implementing policies that reward sustainable behaviour are crucial steps in this direction.
The Affordable Energy Action Plan focuses on four priority pillars:
- Reducing energy costs through fair pricing, tax reductions and modern contracts;
- Deepening the Energy Union with market integration and stronger interconnections;
- Accelerate the licensing of investments in RES and grid infrastructure;
- Strengthening resilience, with storage, decentralisation and energy democracy.
The action plan also includes:
- Reduction of the time needed to permit RES and grid projects to less than 12 months in priority areas;
- Facilitating projects of “common interest” with guidelines for EU member states;
- A shift to digitalisation and smart investments to reduce costs and increase efficiency;
- Smart meters and energy flexibility: from luxury to necessity.
The European Commission recognises that demand-side flexibility is crucial to avoid blackouts and to use networks efficiently.
Smart meters
Smart meters allow consumers to monitor and manage their consumption in real time. There is an urgent need to promote dynamic tariffs and multi-zone contracting to incentivise energy use at low-cost hours.
The Plan places the citizen at centre stage, encouraging the facilitation of citizen participation in energy communities.
Under the Action Plan, the Commission will issue guidelines to encourage retail contracts to incorporate rewards for flexibility services (such as consumption shifting, demand response). The aim is to make flexibility economically attractive for both the final consumer and the supplier.
However, there are voices within the EU, such as that of CAN Europe, which proposes increased ambition, such as a 50% reduction in energy demand by 2040, the removal of fossil fuel subsidies by the end of 2025 and socially driven tax reform.
The future cannot wait
The success of the Action Plan will be judged not only on its ambition, but also on the speed and fairness of its implementation.
With smart grids, citizen participation, more flexible contracts, and political will, Europe can achieve a green and socially just energy transition.
The question is, will we move fast enough in Cyprus?
Anthi Charalambous is Director of the environmental and energy consulting firm ideopsis Ltd
