“Action Plan for Affordable Energy” – a solution for citizens or a win for big corporations?

Cecília Pires (PhD Candidate at the School of Law of the University of Minho | FCT research scholarship holder – 2023.01072.BD)

In February 2025, the European Commission presented the “Action Plan for Affordable Energy”,[1] a strategy developed within the framework of the “Competitiveness Compass for the European Union (EU)”, which aims to reorient the work of the European Commission over the next five years with a view to reviving economic dynamism in Europe.[2]

With the clear intention of reducing the number of European citizens affected by energy poverty, tackling the near doubling of retail electricity prices for industrial consumers, as well as mitigating the difference in energy prices between the EU and its main competitors[3] – a circumstance that could generate a movement towards deindustrialisation and disinvestment in Europe –, the “Action Plan for Affordable Energy” provides for a series of measures to promote the reduction of energy costs for citizens, businesses, industries and communities across the EU, guaranteeing access to cheap, efficient and clean energy for all Europeans.

The new European energy strategy focuses on four pillars, and the respective actions – materialised in the form of revised directives, new directives, strategies, among other instruments – will be adopted over time, some of which are expected to start immediately.

The first pillar concerns the need to reduce energy costs for all, through the adoption of specific actions aimed at making electricity bills more affordable: i) reducing the costs of the energy system through more efficient network charges; ii) enabling consumers to migrate to cheaper energy suppliers and benefit from affordable renewable energy; iii) lowering the cost of electricity supply by reducing barriers for new players, especially energy-intensive industry, and by concluding long-term electricity supply contracts; iv) reducing permitting times for new clean energy sources and energy infrastructure, particularly for large projects – including new nuclear technologies – by digitising permitting processes and substantially simplifying and shortening environmental impact assessments; v) accelerating the expansion, modernisation and digitalisation of networks to enable interconnection, including cross-border, between areas with vast clean energy potential and European regions with high energy demand; vi) increasing system flexibility through storage and demand response; vii) promoting functional gas markets; and viii) promoting energy efficiency on a European scale.

The second pillar concerns the consolidation of the Energy Union, i.e. the strengthening of the EU’s energy infrastructure and the effective integration of the EU energy market. In this dimension, it is envisaged to launch an “Electrification Action Plan” and a “Heating and Cooling Strategy” as a means to reinforce the electrification of the energy system, broaden the sources of clean energy generation, increase the energy efficiency of the system, decarbonise industry, mobility and the heating and cooling sector, as well as encourage the adoption of clean and locally-based energy. There are also plans to update the “Nuclear Illustrative Programme”.[4] Furthermore, there is a commitment to digitalisation, i.e. the use of technologies to save energy. To this end, the European Commission will adopt a “Strategic Roadmap for Digitalisation and Artificial Intelligence (AI) in the Energy Sector” and launch the “European Strategic Energy Technology Plan” (SET Plan).

The third pillar focuses on the need to attract investment in green technologies and projects. To this end, plans are to support industries by facilitating the financing of decarbonisation, flexibility and industrial electrification projects and, additionally, tax credits and deductions for the purchase of electrification equipment and intelligent control systems. Furthermore, research and development into clean technologies is to be encouraged. Also in this pillar, actions are presented with a view to strengthening solidarity mechanisms in the supply of energy between Member States, namely the creation of a European Energy Crisis Centre and the need to develop a more systemic and comprehensive approach to the storage and security of energy supply.

Finally, the last pillar emphasises the importance of the EU being prepared to face potential energy crises, particularly geopolitical ones, natural disasters, cyber-attacks or volatility in global fossil fuel markets. Therefore, contingency and emergency response plans are to be consolidated and integrated throughout the European energy sector, by harmonising provisions scattered in various specific legislations, as well as periodically carrying out simulation exercises and stress tests and creating emergency communication channels and rapid decision protocols covering the entire EU, enabling measures such as temporary energy rationing or the activation of strategic reserves to be activated immediately and on an emergency basis.

In general, the “Action Plan for Affordable Energy” seems to be based on the assumption that it is not possible to reduce energy costs without realising the energy transition, nor by acting on just one specific point in the sector, which turns out to be a sound assessment. However, there are a few points that call for attention.

The first is that although the document refers to the need to decarbonise and reduce greenhouse gas (GHG) emissions, the Green Deal and the Paris Agreement targets – the driving forces behind the EU’s energy transition model – are not mentioned directly at any point in the document. Analysing this aspect shows that the European Commission has gone backwards, going against the path it was following until recently. In fact, although the energy transition also served to promote the EU’s energy independence and contribute to increasing European competitiveness, it was not centred on these points.

However, an analysis of the content of the “Action Plan for Affordable Energy” conveys the message that the focus of the EU’s energy policy is no longer on energy transition for mainly environmental and climate purposes, but above all on reducing energy costs in the name of fear of deindustrialisation and disinvestment, which would consequently weaken the EU’s competitiveness. This is also evident from the fact that one of the measures planned to make the energy transition viable and thus reduce the cost of access to energy is the substantial simplification and shortening of environmental impact assessment procedures for the licensing of energy projects, especially large-scale ones, which could jeopardise environmental and social sustainability. In addition, there is strong encouragement for projects that exploit renewable energies on a large scale, such as solar and wind farms, including offshore ones.

In this context, it is important to remember that renewable sources are not always environmentally sustainable, since when exploited on a large scale, they can reduce costs but cause significant socio-environmental impacts, such as compromising ecosystems, reducing biodiversity, forced displacement or social tensions, to the extent that local inhabitants bear the negative impacts and altered ways of life, while the economic benefits are concentrated in companies or investors, who are often not local and only benefit from the profits of these projects.

Another aspect worth highlighting is that the “Action Plan for Affordable Energy” seems to attach little importance to the “right to participate” – exercised through self-consumption, collective self-consumption and participation in energy communities –which derives from Directive (EU) 2019/944 [on the internal market for electricity (IEMD)] and Directive (EU) 2018/2001 [on renewable energy sources (RED II)]. These directives provide for the possibility of citizens producing the energy they consume locally and communally, recognising their right to collectively manage community energy production projects and become protagonists in those decision-making processes – regarding the structuring of financing, distribution of benefits, application of surpluses, or definition of the community energy strategy. Thus, although the “Action Plan for Affordable Energy” refers to the importance of involving citizens in the energy transition, including them in the list of the public it intends to benefit, citizens are treated above all as mere consumers who pay less for electricity, and are not effectively seen as “prosumers”, i.e. consumers who act directly and actively in the energy market, through the production and management of energy and the energy system itself.

Thus, although the “Action Plan for Affordable Energy” has highlighted the need to modernise and strengthen energy infrastructures – a factor that can favour the role of the energy prosumer – and explicitly mentions energy communities, the overall focus of the Plan is not on these solutions which, ideally, can bring environmental, social and economic benefits to communities and their members collectively, as well as promoting social cohesion and providing the opportunity to transform the energy sector by changing, to the common benefit, who controls infrastructure, policies and agendas on energy issues. As mentioned, the Action Plan for Affordable Energy prioritises large renewable energy projects. 

In view of the above, it is true that the Plan’s central aim is to realise the energy transition as a way of reducing energy costs. Even though this objective is present in the official discourse, it is important to assess whether the “Action Plan for Affordable Energy” is actually aimed at benefiting citizens – or whether, in practice, it serves the interests of large companies (especially in the industrial and energy sectors) that have long opposed environmental and climate preservation measures, mobilising arguments against the decentralisation of the energy system that includes citizens and thus making it difficult for them to fully exercise their role as prosumers.

[1] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action Plan for Affordable Energy (COM(2025) 79 final), Brussels, 26.2.2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52025DC0079.

[2] European Commission, “An EU Compass to regain competitiveness and secure sustainable prosperity”, Press Release, 29 January 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_339.  

[3] Eurostat data base (Online data code: ilc_mdes01).

[4] Document aimed at describing the current situation and possible future scenarios for the EU nuclear sector, in the context of a broader energy strategy [COM(2007) 565 final]. It derives from the duty laid down in Title II, Chapter IV, Article 40 of the Euratom Treaty, which requires the Commission to “periodically publish illustrative programmes indicating in particular nuclear energy production targets and all the types of investment required for their attainment.”

Picture credit: by Burak The Weekender on pexels.com.