EU to modernise energy infrastructure to bring down prices

TALLINN - The European Commission's European Grid Package and Energy Highways initiative, presented on Wednesday, will modernise and expand the grid infrastructure to ensure that energy can flow efficiently in all member states.

The new approach will allow cheaper clean energy to be integrated into the infrastructure and accelerate electrification to make the best use of the EU's existing energy infrastructure, while supporting the development of grids and other physical infrastructure in the EU.

Commissioner for Energy and Housing Dan Jørgensen said: "A truly connected and integrated energy system is the foundation of a strong and independent Europe. To achieve this, we need an energy infrastructure network of modern, fully interconnected cables, pipes and grids that allows clean, affordable, and home-grown energy to flow freely and safely to every corner of the EU. This is exactly what we are doing with today's proposal: it is a common European energy project that supports affordable living, economic competitiveness, security, and decarbonisation."

Eight future so-called "energy highways" are set to cover the most pressing infrastructure needs that require additional short-term support for implementation. They were selected based on the strategic importance of the projects in shaping the Energy Union and whether they have the necessary political support in the EU for successful implementation. The Commission will promote the construction of the energy highways in every possible way. All projects are EU-level priorities, and the Commission will support member states in their priority development at the national level as well.

To modernise the grid infrastructure, the Commission also proposed additional financing methods. Examples include energy cost-sharing and bundling: increasingly integrated cross-border energy infrastructure also benefits areas outside its own territories. Permitting procedures will also be accelerated.

The Commission's proposals will now be submitted to the European Parliament and the Council under the ordinary legislative procedure.

Despite efforts so far, the EU has not yet achieved the level of interconnection between member states that would allow the Energy Union to truly function. Several member states are behind schedule in meeting the 15 percent interconnection target set for 2030. The cost of acting too slowly is exceptionally high: in 2022, fossil fuels had the largest share of total energy consumption in the EU (70 percent), with 98 percent of all oil and gas used in member states being imported. This leaves the EU dependent on price volatility and geopolitical risks.

In 2024, the price of industrial electricity in the EU reached €0.199 per kWh, compared to €0.082 in China and €0.075 in the US. In the first half of 2025, the average electricity price for consumers in the EU varied from €0.3835 per kWh in Germany to €0.1040 per kWh in Hungary, while prices for business consumers ranged from €0.2726 per kWh in Ireland to €0.0804 per kWh in Finland. The main reason for the difference is the insufficient level of investment in and integration of infrastructure. Therefore, increasing financial support is very important. Under the Multiannual Financial Framework for 2028-2034, the Commission has proposed increasing the energy budget of the Connecting Europe Facility fivefold, from €5.84 billion to €29.91 billion.