EU’s State Of Energy Union 2024: Progress In Renewable Energy, Security, And Competitiveness – Report

The European Commission has released the State of the Energy Union Report 2024, highlighting significant progress made by the EU in managing energy challenges and advancing towards a clean energy future. The report outlines how the EU has addressed critical issues in energy supply and market stability, achieved substantial milestones in renewable energy, and laid the groundwork for future economic growth and competitiveness.

Over recent years, the EU has successfully managed risks to its energy security, regained control over energy markets and prices, and accelerated its transition to climate neutrality. Renewable energy generation has reached new highs, with renewable sources accounting for half of the EU’s electricity generation in the first half of 2024. The reliance on Russian gas has decreased dramatically, falling from 45% in 2021 to 18% by June 2024. Meanwhile, imports from trusted partners such as Norway and the US have increased.

The EU has also made substantial reductions in gas demand, cutting it by 138 billion cubic meters between August 2022 and May 2024. The EU reached its winter gas storage target of 90% by August 19, 2024, well ahead of the November deadline. Energy prices have become more stable and remain significantly lower than the peak levels seen during the 2022 energy crisis.

The EU has made significant strides in reducing greenhouse gas emissions, which fell by 32.5% from 1990 to 2022. During the same period, the EU economy grew by approximately 67%. On the global stage, the EU has led initiatives to triple renewable energy capacity and double energy efficiency improvements, goals endorsed by all parties at COP28 in Dubai.

Wind power has surpassed gas to become the EU’s second-largest source of electricity, following nuclear power. By the first half of 2024, renewables provided 50% of the EU’s electricity. Despite a 4.1% reduction in primary energy consumption in 2022, further improvements are needed to meet the 11.7% reduction target by 2030. Enhanced efforts are required in electrifying heating systems and renovating buildings to achieve these goals. Addressing high energy prices is also crucial for improving EU industry competitiveness and accelerating investment in infrastructure needed for a more electrified economy.

Member States are required to submit updated National Energy and Climate Plans to ensure progress towards 2030 energy and climate targets. Although draft plans show progress, they must be revised to meet the goal of reducing net greenhouse gas emissions by at least 55% by 2030. The Commission’s report on the Governance of the Energy Union and Climate Action indicates that this regulation is essential for achieving 2030 targets through better planning and reporting.

Looking ahead, the EU faces new challenges such as ambition gaps in renewables and energy efficiency, increasing energy poverty, competitive energy pricing, and strategic dependencies. Addressing these issues will require coordinated efforts at both EU and Member State levels.

In supporting Ukraine amidst ongoing Russian attacks, the EU has enhanced energy support. The synchronization of Ukrainian and Moldovan grids with the Continental European Network has stabilized Ukraine’s electricity system, with a commercial exchange capacity of 1.7 GW. Over 40% of Member States’ donations were directed to the energy sector, with contributions from the Union Civil Protection Mechanism totaling over €900 million and the Ukraine Energy Support Fund mobilizing over €500 million. The EU’s €50 billion Ukraine Facility will support Ukraine’s recovery and economic growth until 2027.

To enhance energy security and competitiveness, the EU recognizes the importance of the Net-Zero Industry Act and the Critical Raw Materials Act, along with reforms in the Electricity Market Design. The Innovation Fund, with a budget of around €40 billion until 2030, plays a crucial role, particularly through the European Hydrogen Bank, which recently awarded nearly €720 million to renewable hydrogen projects.

New energy market legislation aims to protect vulnerable consumers and ensure affordable energy access. The Social Climate Fund will mobilize at least €86.7 billion for 2026-2032, supporting energy efficiency renovations, affordable housing, clean heating, and low-emission transport.

This annual report updates on the EU’s progress towards the Energy Union’s goals, reflecting on achievements and ongoing challenges in the last year of the Commission’s mandate. It highlights the EU’s ambitious response to the energy crisis and its ongoing commitment to a clean and competitive energy future.