EPICO has published a new Policy Brief ahead of the unveiling of the Electrification Action Plan (EAP), setting out what to look for in the plan and what will determine its success.
EPICO's analysis argues that Europe does not face an electrification ambition gap, but an implementation gap. Unless the Electrification Action Plan addresses taxation, grids, flexibility and market design, electrification rates are unlikely to accelerate despite growing renewable power capacity.
Europe's electrification rate has barely moved in a decade, stuck at around 23% of final energy consumption, even as the power sector has become roughly three-quarters decarbonised. Energy price shocks have demonstrated that this stagnation carries a direct economic cost, and the debate in Brussels risks repeating a familiar pattern: consensus on ambitious targets, insufficient delivery. Electrification is consequently far more than a decarbonisation strategy: by shifting reliance from imported fossil fuels to domestically produced renewable energy, it is also a question of European energy sovereignty, industrial competitiveness and economic resilience.
EPICO's recommendations:
- Taxation reform: electricity should be the preferred energy carrier from a fiscal perspective; current frameworks in several Member States, including Germany, still favour gas over electricity.
- Network tariff design: tariffs should reward flexibility and reflect actual system costs, rather than penalising electrification investments.
- Grid deployment: permitting must be accelerated, and anticipatory investment by network operators enabled, in line with the European Grids Package.
- Flexibility and storage: batteries and demand-response should be recognised as essential system resources and supported by stable, predictable regulatory frameworks.
- Energy efficiency: electrification and building renovation or industrial efficiency must advance together, not be treated as competing priorities.
- Carbon pricing: the ETS should be preserved as the central long-term investment signal, with revenues channelled more actively into electrification and grid modernisation.
- Technology honesty: direct electrification should be prioritised where it is the most efficient pathway, while hydrogen, renewable fuels and CCUS remain necessary for sectors where alternatives are limited.