Three years after Russia’s invasion of Ukraine, the European Union continues to grapple with the profound economic impact of the conflict, particularly in the form of an ongoing energy crisis. Soaring energy prices are straining European households, with an estimated 47 million people now living in energy poverty, a 57% increase since 2019. This term, while not universally defined, generally refers to households that either cannot afford basic energy needs—such as heating during harsh winters—or those who spend an excessive proportion of their income on energy bills.
The surge in energy poverty is not only hurting households but also undermining Europe’s broader economic stability. Rising costs are eroding the competitiveness of European businesses on the global stage. In response, the European Commission has unveiled an ambitious €2.5 trillion energy action plan aimed at slashing energy bills over the next 15 years, while simultaneously reducing Europe’s reliance on external energy sources—particularly Russian oil and gas.
The “Affordable Energy Action Plan” outlines measures to provide immediate relief to consumers while advancing long-term goals. Key components include accelerating the integration of Europe’s electricity systems, boosting renewable energy capacity, and enhancing market interconnections. The plan also emphasizes energy efficiency and a greater reliance on renewables to drive down costs.
“We’re driving energy prices down and boosting competitiveness,” European Commission President Ursula von der Leyen stated. “We’ve already made substantial strides by increasing renewable energy. Now, with the Affordable Energy Action Plan, we will achieve more predictable energy prices, stronger connections across Europe, and greater energy security. This is the next step in creating a true Energy Union.”
Since the invasion, the EU’s push for renewable energy has gained momentum, with solar and wind power emerging as pivotal sectors. Germany, for example, which once relied on Russia for over half of its natural gas and a third of its oil, is now on track to source 20% of its energy from solar power. However, obstacles remain, including the need for enhanced energy storage solutions and grid infrastructure to support the increasing share of renewable energy. Without these advancements, Europe risks facing grid instability and potential energy price fluctuations, which could deter investment.
The European Commission’s plan to expand renewable energy capacity aims to address these issues, though it will require significant regulatory adjustments and infrastructure investments to avoid delays in renewable energy projects.
“Renewable energy is far cheaper than fossil alternatives, which will ultimately drive prices down,” EU Commissioner for Energy and Housing stated. He also highlighted the need for improved electricity grid connectivity across Europe, noting that enhanced interconnection would further reduce energy costs. “A more interconnected grid means lower prices for consumers and greater energy reliability,” he added. Additionally, controlling the gas market and preventing excessive profits would contribute to further price stabilization.
As Europe navigates these challenges, the proposed action plan represents a crucial step toward securing a more sustainable and affordable energy future for its citizens.