The Battle for Cheaper Electricity at the Heart of the European Agenda

The new package of conclusions from the European Council highlights the battle for cheaper electricity as a central element of the European agenda. Recognizing the increases in fossil fuel prices as a structural risk leads to an emphasis on the energy transition, increasing renewable energy sources, energy storage, and interconnections. At the same time, leaders recognize the need for immediate cost interventions due to pressure from industry and households. The crisis in the Middle East accelerates the need for an immediate toolbox of measures to address rising fuel prices and specific measures for all components of the electricity price. The Council calls for a review of the emissions trading system (ETS) to reduce the volatility of the carbon price, while maintaining incentives for green investments. Emphasis is also placed on the need for ambitious measures for electricity grids, with faster permitting and investments in interconnections, to enable a truly single electricity market.