Opinion of the European Economic and Social Committee – Towards a balanced European energy system (own-initiative opinion)
Date: 2025-06-19
Institutions: European Economic and Social Committee
Subjects: EU energy policy, carbon neutrality, competitiveness, energy cooperation, energy diversification, energy market, energy transition, renewable energy, security of supply








C_202504210EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/4210


20.8.2025






Opinion of the European Economic and Social Committee
Towards a balanced European energy system
(own-initiative opinion)
(C/2025/4210)


Rapporteur: 
Zsolt KÜKEDI

Co-rapporteur: 
Philippe CHARRY






Advisors


László SZABÓ (for the rapporteur)
Véronique CHAPPELART (for the co-rapporteur)




Plenary Assembly decision


23.1.2025




Legal basis


Rule 52(2) of the Rules of Procedure




Section responsible


Section for Transport, Energy, Infrastructure and the Information Society




Adopted in section


27.5.2025




Adopted at plenary session


19.6.2025




Plenary session No


597




Outcome of vote
(for/against/abstentions)


140/3/1




1.   Conclusions and recommendations

The EESC:








1.1.


welcomes the European Commission’s efforts to create a stable, affordable and sustainable energy supply framework for businesses and consumers;












1.2.


considers energy affordability, carbon neutrality and energy security to be the core objectives of a balanced energy system;












1.3.


encourages continued adaptation of the EU energy market to achieve climate neutrality by 2050 as the primary objective, while stressing that regulation of the internal energy market should be designed to minimise the impact of speculative trading practices and short-term price volatility and to ensure security of supply, stable and predictable prices and distributive effects. Access to affordable energy for all should be ensured;












1.4.


notes that Europeans pay significantly more for energy than many other regions, especially in Asia and the US, which harms competitiveness, and that high energy prices have forced companies, particularly in manufacturing, to relocate or shut down. These challenges must be addressed urgently to avert the risk of further job losses;












1.5.


points out that several Member States have missed deadlines for implementing electricity market reforms, delaying the benefits of predictable pricing and dynamic tariffs;












1.6.


stresses the need to expand flexibility through affordable storage solutions, innovative technologies, new market participants and incentives. Maintaining baseload generation (nuclear and/or gas) and a diverse clean energy mix is essential to balance supply and demand. The recent blackout in Spain and Portugal reminds Europe of the urgent need to invest in a modern, well-interconnected energy network - one that ensures solid backup generation, includes a sophisticated real-time alert system to reduce energy use, and guarantees the cybersecurity of the grid;












1.7.


highlights the need to increase flexibility and efficiency, the role of demand-side response, smart consumption and decentralised renewable energy generation. The EESC calls for awareness campaigns, efficiency-enhancing solutions and business models that support the pooling of smaller consumers and producers;












1.8.


calls for faster cross-border interconnections and modernisation of infrastructure to complete the Energy Union and strengthen internal energy flows;












1.9.


supports the call by the Commission to recommend that Member States temporarily lower taxes and levies to curb high costs as stated in the Affordable Energy Action Plan. The EESC stresses the need to keep European energy prices competitive globally, while preserving the international competitiveness of the European economy;












1.10.


calls for an examination of how to make better use of underexploited sources (e.g. geothermal energy for electricity, biogas for local production) and to accelerate innovation (efficiency, digitalisation, grid flexibility, sectoral integration) through targeted investments and de-risking instruments;












1.11.


proposes a flexible but firm roadmap for fossil-fuel-dependent Member States, with EU and national cooperation. The EESC welcomes energy policies that allow for citizen engagement, co-planning, social acceptance and a framework for a just transition;












1.12.


recommends making decentralised renewable energy production (prosumers and energy communities) more accessible by removing regulatory gaps and tackling conflicts of interest;












1.13.


recommends embedding structured and meaningful youth participation into all stages of energy policymaking through mechanisms such as youth councils, advisory groups and an EU Youth Test as part of major legislative impact assessments in the energy field;












1.14.


proposes the development of a European Transient Stability Action Plan, including transient-state impact assessments, mandatory standards for dynamic frequency response (synthetic inertia), transient response testing for new assets (fast-acting storage), frequency-based load-shedding protocol and annual system inertia reporting across the EU;












1.15.


welcomes the Commission’s announcement that it will finally more specifically address empowerment in a just energy transition and the announced Citizens’ Energy Package, and is happy to be involved in co-designing this process.




2.   General comments









2.1.


A balanced European energy system in the short term integrates renewable, fossil and nuclear sources to ensure a stable, affordable and sustainable energy supply, while gradually moving to clean energy sources in the long term. It requires balancing intermittent and constant production, controllable and non-controllable sources and regional energy differences.












2.2.


The European energy market must be adapted in such a way that it meets the objective of climate neutrality by 2050 at the latest, combined with the objectives of security of supply, stable and affordable prices and ensuring access to energy.












2.3.


The EESC identifies three key goals for a balanced European energy system: affordable energy, carbon neutrality and energy security. To achieve them, key steps include transitioning to clean energy, electrification, improving grid connections, diversifying sources, enhancing storage and management, promoting circular economy and efficiency, advancing awareness of sufficiency, aligning policies in diverse policy fields and investing in research and innovation for energy security and equity.












2.4.


The EU has strengthened the regulation to accelerate the use of renewables and enhance energy efficiency and the operation of the Emissions Trading System (ETS). The Energy Union seeks to unify markets while ensuring sustainability. The Green Deal aims to achieve a 55 % emission cut by 2030, 90 % by 2040, and climate neutrality by 2050, requiring major changes in energy production and distribution.












2.5.


Balancing energy sources is challenging. Renewables reduce fossil fuel dependency but are unstable, and more flexible sources such as hydropower and gas are unevenly distributed. Limited storage and market volatility add to the problem. The EU is tackling this with grid upgrades, storage solutions, and capacity mechanisms.












2.6.


In the Competitiveness Compass, published in 2025, the European Commission set its objective to balance decarbonisation with economic innovation and industrial modernisation. The Clean Industrial Deal combines the achievement of climate and competitiveness goals in a strategy for growth and prosperity. This is supported by the Affordable Energy Action Plan proposing to reduce energy bills in the short term, but the Stability Pact contradicts this plan because it leaves Member States no room for manoeuvre to accelerate cost-saving structural reforms and strengthen our energy systems against future price shocks. However, the plan ignores the main factors that cause high energy prices – high import prices of natural gas, high EU ETS I allowance prices and shortages of energy sources to meet increasing demand for electrification.












2.7.


The EESC supports the Commission’s intention to implement the recently announced strategies and action plans and with this opinion makes further proposals to ensure that Europe’s energy system is affordable and climate-neutral, while taking into account previously unused capacities (e.g. geothermal and bioenergy), national and regional territorial specificities, competitiveness, security, decarbonisation and a just transition in a genuine and sovereign Energy Union.




3.   Specific comments









3.1.


Renewables have reduced costs and emissions, making solar and wind competitive, but their weather dependence causes volatility in supply and in prices. Limited storage and outdated grids lead to congestion and imbalances. Innovation is key to the transition: smart grids, sectoral integration, AI and digital tech enhance efficiency, reliability and flexibility while boosting jobs and industry.












3.2.


Measures to improve the integration of renewable energy sources into the European energy system and the structure of the EU’s electricity market entered into force in mid-2024 (1), but not all Member States have been able to transpose them into national law by the given deadline of 17 January 2025, which hinders the development of a flexible and affordable electricity market.












3.3.


Technological neutrality, within the stated framework, is crucial for a balanced EU energy system as it ensures energy security, cost efficiency, and innovation without favouring specific sources. A diverse energy mix reduces dependence on any single source, while competition drives advancements in efficiency and sustainability. It also allows flexibility for Member States to choose solutions that match their resources and needs while adapting to emerging technologies such as hydrogen or advanced storage. By keeping a technology-neutral approach, the EU can build a resilient, cost-effective, and future-proof energy system.












3.4.


Energy communities and consumer (or prosumer) participation are changing the EU’s energy system. It is important to note that energy communities help to balance supply and demand, and their role in a balanced energy system must increase. The EESC has previously stressed the contribution of a partly self-sufficient and partly grid-generated model of ‘prosumer’ individuals or organisations to the energy transition (2), which reduces grid dependency and encourages more conscious energy consumption. Local, community-owned renewable production boosts security, should lower costs and eases grid load by meeting local demand, while involving local authorities and young entrepreneurs in the operation of decentralised, flexible and resilient energy systems. This requires close cooperation between distribution system operators and energy communities to support investments in emerging energy communities and the deployment of local storage capacities. The motivation of distribution system operators to establish such community generation systems must be created, because they often have divergent interests and incentives in the ecosystem. In addition, Member States appear reluctant, which also makes it difficult to establish energy communities. Energy poverty and public acceptance remain a challenge.












3.5.


Europe’s energy system is changing with more renewables, requiring better pricing and stability. While solar and wind grow, stable sources such as geothermal, hydropower and nuclear power plants continue to play a role in providing baseload electricity in some Member States. The cheapest sources (like wind and solar, which have nearly zero marginal cost) are the first to supply, but covering peak demand requires quick-start, flexible and – to the extent possible – zero-carbon backups (e.g. (bio-) gas, hydrogen and storage solutions), while acknowledging that increased reliance on such balancing resources contributes to higher system costs.












3.6.


The rise of renewables is reshaping the market, reducing the role of fossil-fuel-based energy generation/resources. In Europe electricity demand has stagnated over the past decade, while traditional plants face lower operating hours and rising costs, making many obsolete. Capacity mechanisms keep some on standby for grid stability. However, electrification and digitalisation will soon increase electricity demand.












3.7.


New solutions such as energy storage, demand flexibility, sectoral integration and renewable integration in balancing markets are key to ensuring system stability.












3.8.


High energy prices signal the need for investment to stabilise the system. When prices spike owing to low availability of renewables and high demand, it highlights the need for flexibility.
The EESC sees the following key areas where investments should go:






—


Energy storage: batteries, pumped storage and heat storage (e.g. sand or water) balance supply and demand, though these require major investments. Surplus energy can also produce low-carbon and renewable hydrogen as storage;










—


Flexible generation: quick-start (bio-)gas and hydrogen plants help balance supply when production from renewables fluctuates;










—


Decentralised producers: smaller-scale renewable energy producers (e.g. solar parks) who use their production to meet local needs and thus provide flexibility in the system;










—


Demand response: smarttech lets businesses and homes shift energy use to cheaper, off-peak hours;










—


Interconnection: in an integrated energy union, Member States must also rely on each other to meet their energy needs. Cross-border trade should be supported through interconnectors;










—


Security of supply: a more flexible energy system and more storage capacity are required for a continuous and predictable supply of energy, which is a fundamental condition for economic and social stability;










—


Developing production and generation capacities: it is important for Europe to reduce its external dependency on technology, improve security of supply, create jobs and industrial development by increasing its own production capacities in energy storage, heat storage and renewable assets;










—


Diversification and exploration of new energy sources: the EU should actively explore new energy sources, especially in strategic areas, thereby strengthening the security of the energy system and reducing dependency, while also gaining geopolitical advantages.
















3.9.


Recent disturbances in the Iberian Peninsula highlight the increasing vulnerability of the European power grid. These short but critical imbalances, caused by sudden changes such as the disconnection of large generators or power lines, can lead to severe oscillations in frequency and voltage, potentially triggering cascading failures. Unlike in the past, today’s power systems contain a higher share of inverter-based renewable sources (solar, wind), which do not inherently provide physical inertia. This increases susceptibility to rapid frequency deviations. Modern grid stability therefore requires:






—


Synthetic inertia: Mandatory capability for all new inverter-based generation to respond dynamically to frequency changes;










—


Fast-acting storage: EU-wide reserve requirements for energy storage systems that can react within milliseconds during disturbances;










—


Improved load-shedding protocols: A harmonised EU framework for automatic and gradual disconnection of industrial loads to protect overall system integrity;










—


AC/DC coordination: Mandatory transient coordination protocols for all hybrid AC/DC interconnectors to prevent destabilising feedback loops;










—


Real-time coordination platform: Creation of an EU Digital Grid Observatory to enable cross-border monitoring and automated emergency response.








4.   Objectives to achieve









4.1.


The EU aims to achieve climate neutrality by 2050 under the Green Deal, with a 55 % emission cut and 32 % renewable energy target by 2030. Policies such as the Emissions Trading Scheme (ETS) push industries to adopt cleaner technologies. The Energy Union coordinates national efforts to ensure supply and meet climate goals. Funding programmes such as Horizon Europe and the Just Transition Fund support affected regions and sectors












4.2.


The EU supports cross-border energy links through projects such as TEN-E, which prioritises key infrastructure, including high-voltage power lines, to improve connections between Member States.












4.3.


A balanced energy system uses multiple sources:






—


Fossil fuels as a temporary solution, though their role is shrinking;










—


Nuclear for stable, low-carbon power;










—


Renewable and low-carbon hydrogen and fossil gas with carbon capture and storage (CCS) as flexibly deployable power stations;










—


Renewables with storage and cost-effective technologies for reliability.
















4.4.


Diversifying renewable energy sources is key for the EU’s security, emissions reduction and growing demand. The main areas include:






—


Wind (onshore/offshore), expanding especially in the North Sea;










—


Solar, rapidly growing in Hungary, Spain, Italy and Germany;










—


Biomass and geothermal, used in specific regions;










—


Hydropower, still important but with limited growth.
















4.5.


Key investment areas include:






—


Upgraded infrastructure;










—


Interconnections;










—


Extraction capacities;










—


All clean energy sources, including renewable and low carbon hydrogen for decarbonising industry and transport and fossil gases (with CCS), in the form of flexibly deployable power plants;










—


Electrification;










—


Smart grids for better integration of wind and solar energy and increase flexibility options.




Fossil and nuclear energy remain important in many countries in the short term: the roles of gas remains important, but the EU is reducing its reliance, especially on Russian supplies. Nuclear is a key clean energy source for countries choosing to utilise it in the future.












4.6.


Despite these efforts, challenges remain, including:






—


High costs: interconnections and battery storage require major investment. Strict environmental and health rules are already globally high and often delay key infrastructure projects. The European Commission should propose a mechanism that balances public interest and regulations;










—


Regulation: coordinating cross-border electricity flows is complex, creating regulatory and market challenges;










—


Dependence: solar and battery equipment generally come from third countries, therefore a real European industry policy is needed to ensure Europe’s energy sovereignty;










—


Public approval: Wind turbines or new (high-voltage) power lines are facing local opposition due to environmental and aesthetic concerns. The EESC suggests solutions to increase local support.
















4.7.


A balanced energy system must consider the diverse needs of Member States, from industrialised to less developed regions, ensuring a just transition without increasing social inequalities. For the time being, some Member States are forced to rely on the use of fossil resources much more than would be desirable. Despite the intentions of REPowerEU, several Member States still rely heavily on fossil fuels, with natural gas and coal playing a major role. These rigid situations encourage the European Commission to work with these countries to help them switch to cleaner, more affordable energy. Reducing energy shortages is key to equity, sustainability and the energy transition, and addresses issues such as unequal access, high costs and regional inequalities in energy sources, especially in Eastern and Southern Europe.












4.8.


Efforts to reduce energy inequalities include:






—


Access to energy: upgrading infrastructure in remote and less developed areas to ensure reliable, affordable energy;










—


Energy poverty reduction: subsidies and aid helping low-income households with energy costs;










—


Energy retrofitting: improving building efficiency to lower long-term expenses.
















4.9.


The shift to renewables can deepen inequalities if access to new technologies is uneven. The EU ensures a fair transition through:






—


Just Transition Fund and Modernisation Fund: supports fossil-fuel-dependent regions by funding industry conversion and worker training;










—


Community energy projects: encourages local renewable energy initiatives to reduce dependence on big energy companies;










—


Energy efficiency: investments in efficient buildings, transport, and industry lower energy use and improve living conditions;










—


Policy consistency: aligning energy policies across the EU to ensure fair prices and equal access and technological neutrality;










—


Education and awareness: promoting energy-saving habits through EU-supported campaigns.
















4.10.


The EESC emphasises that reducing energy inequalities in the EU requires investment in infrastructure, social support, supportive taxation, a fair transition and coordinated policies. The transition must take care of vulnerable populations and disadvantaged regions.












4.11.


The EESC stresses the need for skilled workers in the energy sector as the EU transitions towards sustainability. Key areas of expertise include nuclear and renewable energy (wind, solar, hydropower and geothermal) and smart grid management. It underlines the importance of attractive employment, with competitive wages, career opportunities and working conditions, to address skill shortages and support a resilient energy workforce. The EESC urges Member States to invest in education, upskilling and mobility, integrating renewable energy, climate and sustainability into curricula and supporting young entrepreneurs and start-ups in the clean energy sector.












4.12.


The EESC recognises that while the energy transition creates new jobs, training gaps and labour mobility are still issues. Member States must invest in education and upskilling to support a sustainable energy system.












4.13.


In addition to targeted subsidies and infrastructure upgrades, the EESC supports the scaling up of community energy cooperatives, ensuring that citizens — especially young people and vulnerable groups — have ownership and control over local renewable production.




5.   We need further action









5.1.


The EESC acknowledges that during the transition, temporary natural gas-based balancing may be necessary until energy storage and demand-driven systems improve. While fossil fuels are not a long-term solution, they help stabilise the system in gas-dependent countries in the short term. However, cleaner technologies must be developed in parallel to keep gas use temporary. New gas plants should be CCS-ready or adaptable for hydrogen after 2030.












5.2.


Geothermal energy has significant potential beyond heat supply. The EESC highlighted its importance in opinion TEN/843 ‘The potential of geothermal energy for the green transition’ (3), and the Hungarian EU Presidency helped secure a joint Declaration to accelerate its expansion. Geothermal energy plays a key role in Europe’s transition to a local, sustainable and cost-effective system. As part of the Sustainable Energy Security Package (2016), the EU recognised geothermal as a stable baseload source to balance intermittent renewable energy sources such as wind and solar. The EESC urges the Commission to develop a comprehensive geothermal strategy for both heat and power, helping diversify the energy mix, reduce imports, and strengthen local energy systems.












5.3.


Biogas can play a key role in Europe’s decarbonisation, bioeconomy and energy transition. Member States could produce up to 40 billion cubic metres of biomethane by 2030, 101 billion by 2040 and 150 billion by 2050 (4). The EESC urges the Commission to increase support for biogas and biomethane production.












5.4.


Modernising the grid is vital for a flexible and reliable energy system. In opinion TEN/771 ‘Public investment in energy infrastructure as part of the solution to climate issues’ (5), the EESC called for public investment in grid infrastructure and recognising its public interest role in supporting renewables. This should include not only upgrades but also integrating solutions such as demand-side response (DSR) to reduce peak demand and cut costs.












5.5.


In its opinion TEN/837 ‘The future of the supply and pricing of electricity in the EU’ (6), the EESC proposes a government-backed market maker (an e-facility) to help stabilise electricity prices, ensuring climate neutrality, supply security and affordable energy, as an option for Member States.












5.6.


Furthermore, every new grid infrastructure or interconnector project under the TEN-E framework should be evaluated not only for economic efficiency but also for its transient stability and inertia contribution. Similarly, the Renewable Energy Directive should mandate dynamic frequency response capability in all inverter-based units to support system stability under stress.












5.7.


Based on the recent disturbances in the Iberian Peninsula EESC recommend for the EC to consider as regulatory proposals at EU level:






—


update the TEN-E regulation to require transient-state impact assessments for all new interconnection and grid projects;










—


amend the Renewable Energy Directive to include mandatory dynamic frequency response capability in all inverter-based generation;










—


mandate the integration of fast-acting storage in grid-balancing strategies and speed up their implementation;










—


establish a harmonised EU frequency-based load-shedding protocol, with industrial demand-side capacity commitments;










—


consider translating the above modifications into a European Transient Stability Action Plan, including mandatory standards for synthetic inertia, transient response testing for new assets, and annual system inertia reporting across the EU.
















5.8.


The energy market needs to adapt to increasing renewables. High price volatility may lead to poor investment decisions in the long run. The Clean Industry Deal urges long-term contracts, especially Power Purchase Agreements (PPAs), to stabilise prices, ensuring a technology-neutral approach. Capacity remuneration payments and two-way contracts for difference (see TEN/837) can support flexibility providers, but need reform to avoid inefficiencies. Better harmonisation of support schemes and the pricing mechanism is essential.






Brussels, 19 June 2025.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  See Regulation (EU) 2024/1747 of the European Parliament and of the Council of 13 June 2024 amending Regulations (EU) 2019/942 and (EU) 2019/943 as regards improving the Union’s electricity market design (OJ L, 2024/1747, 26.6.2024, ELI: http://data.europa.eu/eli/reg/2024/1747/oj) and Directive (EU) 2024/1711 of the European Parliament and of the Council of 13 June 2024 amending Directives (EU) 2018/2001 and (EU) 2019/944 as regards improving the Union’s electricity market design (OJ L, 2024/1711, 26.6.2024, ELI: http://data.europa.eu/eli/dir/2024/1711/oj).

(2)  Opinion of the European Economic and Social Committee on individual and collective energy self-consumption as a factor in the fight for the green and energy transition, and for economic and social balance (own-initiative opinion) (OJ C, C/2024/873, 6.2.2024, ELI: http://data.europa.eu/eli/C/2024/873/oj).

(3)  Opinion of the European Economic and Social Committee – The potential of geothermal energy for the green transition (own-initiative opinion) (OJ C, C/2025/111, 10.1.2025, ELI: http://data.europa.eu/eli/C/2025/111/oj).

(4)  
            Decoding Biogases 2025.

(5)  Opinion of the European Economic and Social Committee on the Public investment in energy infrastructure as part of the solution to climate issues (own-initiative opinion) (OJ C 486, 21.12.2022, p. 67).

(6)  Opinion of the European Economic and Social Committee – The future of the supply and pricing of electricity in the EU (own-initiative opinion) (OJ C, C/2025/1187, 21.3.2025, ELI: http://data.europa.eu/eli/C/2025/1187/oj).


ELI: http://data.europa.eu/eli/C/2025/4210/oj
ISSN 1977-091X (electronic edition)