Iran crisis: EU energy policy improvises and reacts

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It is a whole set of measures with which the EU Commission intends to bring about changes in the energy reality in the European Union in the medium term. The measures have come into even sharper focus with the current price shocks as a result of the attack by the USA and Israel on the regime in Iran: Are the plans in Brussels based on the correct assumptions? The Commission sees it that way – and particularly consistently emphasizes the urgency against the backdrop of fossil fuel dependencies.

It is about a threefold approach: The EU must at least adhere to its previous climate goals if parts of the EU are not to be flooded by the sea and affected by climate change-related catastrophic events and the resulting migration movements. At the same time, the transition to a largely carbon dioxide-free energy economy must be financially affordable without posing insurmountable challenges and competitive disadvantages to the economy and citizens. Added to this is the late realization that energy supplies from almost all world powers are used as a means of pressure or even as a weapon. “Domestic clean energy is the only lasting solution for the EU to break the cycle of dependence on fossil fuels and price volatility,” says Commission Vice President Teresa Ribera, responsible for the energy transition.

But which forms of energy generation allow for greater independence from third parties, which are particularly inexpensive? According to EU statistics, EU states, their inhabitants, and businesses spent 375 billion euros on importing fossil fuels in 2024. 38 percent of energy consumption was oil, 21 percent natural gas, 20 percent renewable energies, and 12 percent nuclear power. However, the majority of oil and gas did not come from the EU: the EU imported 57 percent of its energy needs from other countries, while it generated more than half of its renewable energy itself, with a strong upward trend.

Poland's nuclear power offensive as an EU role model?

But the concrete figures vary enormously depending on the member state – and thus also the risks. For Commission President Ursula von der Leyen, almost exactly 15 years after the Fukushima disaster, the new magic formula is: renewables and nuclear power are to form the electricity market of the future together and correct the “strategic mistake”.

After all, 12 out of 27 EU countries have nuclear power plants that are connected to the grid. Poland, in particular, is planning to enter nuclear power with up to twelve reactors to replace the large coal-fired power plants that have largely supplied Germany's eastern neighbor to date. Seven of the power plants planned east of the Oder and Neisse rivers are in the 300-megawatt class, making them significantly smaller than the usual 900- to 1.5-gigawatt reactors. These are not to be supplied by a European provider but by GE Vernova Hitachi Nuclear Energy, GVH, a US company. Although EU companies are involved, the market for small nuclear reactors seems to have bypassed the EU so far. This is precisely what the EU Commission now wants to change and promote: "Homegrown Small Modular Reactors" and those of the fourth generation, which use experimental new designs with new types of nuclear fuels. For this purpose, the Commission has announced funding and other forms of support.

Grids need more investment

But regardless of the form of energy generation, massive further investments in transmission grids are foreseeable. Here, the Commission wants to invest heavily EU funds via the European Investment Bank (EIB). 75 billion euros are to become state investment aid over the next three years, provided that private investors also participate in the financing. The planned measures are not to be state subsidies but explicitly favorable but repayable loans for transmission and distribution network operators, according to the “Strategy for Investment in Clean Energy.”

And yet, as an EU official puts it, “The cheapest energy is the energy that is not consumed at all.” Which is why EU co-financing is also planned for the area of energy efficiency. But what does all this mean for consumers? Here too, the Commission wants to bring about significant improvements, some of which may already be familiar to German citizens. For example, it is to be enshrined in European law that switching energy suppliers can take place within 24 hours. In Germany, this has generally been mandatory since last June, albeit with pitfalls.

Smart meters and dynamic electricity tariffs should finally control load

The Commission is clearly dissatisfied with the slow smart meter rollout. In this regard, the German Federal Network Agency is expected to initiate a formal supervisory procedure for metering point operators for the first time in the coming weeks. A spokeswoman for the Federal Network Agency emphasizes to heise online that “compliance with the law will be enforced with penalty payments.”

So far, only a fraction of EU citizens use dynamic electricity tariffs. Here, the Commission is also thinking aloud about new incentive systems – and mentions, for example, the Australian “Solar Sharer Offer” model, where electricity is provided free of charge for at least three hours a day. In addition, new regulations for energy providers on how they may advertise their products are to be developed by the end of the year.

Further energy regulation in the coming weeks

Significant further decisions for the future EU energy market are imminent in the coming weeks. The question of price determination in the electricity market is to be regulated. Here, the previous so-called merit-order model could be replaced, in which, as a rule, the price of the last short-term available electricity generation capacity, and thus mostly gas power plants, was decisive. But even with the reactions to world events, according to the EU Commission, much will still happen in the coming days and weeks.

(dahe)