EU accelerates wind build-out and electrification of economy to weather fossil energy crisis

Today the European Commission presented "AccelerateEU", its response to the current energy crisis. With AccelerateEU, the Commission is crystal clear: any energy price relief measures must be underpinned by a faster transition to homegrown renewables and a more electrified economy.

Europe has an energy dependence problem. 64% of all the energy we consume is imported. Last year, the EU spent €337bn on imported energy products. Since the escalation of the conflict in the Middle East, the EU has already spent an additional €24 billion on energy imports due to higher prices. Europe's dependence on fossil imports is a structural weakness.

With "AccelerateEU", the Commission stresses that any energy price relief measures must be underpinned by a faster transition to homegrown renewables and a more electrified economy.

"Electrification is a strategic imperative for Europe's independence, security, and prosperity. It needs to happen immediately and at scale. We must make homegrown electricity the cheapest option. This means cutting VAT and taxes and on heat pumps, electric vehicles and other electrification technologies. It means addressing the low hanging fruit in low- and medium temperature heat processes. AccelerateEU is bold political leadership in a time of crisis", says Tinne van der Straeten, WindEurope CEO.

The measures in detail

AccelerateEU stresses the need to replace fossil imports with homegrown renewable power. It's wake-up call for Member States to finally implement EU permitting rules. And it specifically highlights the role repowering old wind farms can play in boosting renewable power supply.

To protect consumers from fossil-fuelled price peaks, AccelerateEU allows Member States to introduce support schemes, energy vouchers and social leasing schemes and lower excise duties on electricity for vulnerable households. For industrial consumers, the Commission will separately adopt updated State aid rules, allowing Member States to support the most exposed economic sectors.

Crucially, the Commission will present legislative proposals on network charges and taxation in May, so electricity is taxed less than gas. Next to that, the Commission will present an Electrification Action Plan by the Summer which will include an electrification target.

AccelerateEU also urges EU Member States to implement the European Grids Package, including addressing grid connection queues - there are 400 GW of wind energy capacity currently waiting for grid connections. Solving this is possible: the UK have halved their queues, from 144.5 GW in 2024 to 73.6 GW now.

Finally, AccelerateEU will help Member States make the most of their EU funding to decarbonise and electrify. This includes the €219bn Recovery and Resilience Facility, EU cohesion funds as well as a new €100bn Industrial Decarbonisation Bank auction.

Market interventions have proven to be ineffective

Next to those helpful proposals, AccelerateEU allows Member States to impose windfall taxes on energy producers.

The response to the 2022 energy crisis contained broad-based interventions, windfall taxes and revenue caps. The Commission ultimately concluded that the benefits of extending such measures were outweighed by negative impacts on market functioning and the energy transition.

Benefits to consumers were limited. But the effect on the wind sector was significant. The measures led to additional bureaucracy, created significant market uncertainty and undermined investment signals.

"We have seen this before, in 2022 market interventions ground wind energy investments to a halt. Wind investments hit their lowest since 2009. Turbine orders nosedived by 47% year on year. And in some cases, gas consumption even increased. Let's not repeat past mistakes", says Tinne van der Straeten.