The next phase of Europe’s clean energy transition

Paula Rey Garcia of the European Commission’s Directorate-General for Energy discusses the progress of the EU’s clean energy transition and the challenges around electrification, affordability, flexibility, and investment.

Outlining the progress made over the last decade, Paula Rey Garcia says there have been “some good developments” which are particularly important in relation to renewable deployment, with the most significant progress taking place in the electricity sector.

Rey Garcia says that the scale of progress demonstrates that “the clean energy transition is underway”. However, she adds that this progress has also created new challenges around integrating renewable energy into electricity systems.

“For the first time, we have electricity generated by wind and solar overcoming fossil fuels in 2024,” says Rey Garcia.

She highlights the record levels of renewable capacity deployment and the increasing share of renewables in the EU power mix. However, she says there are challenges associated with integrating these renewable sources into electricity systems.

“We see the issue of negative price hours,” she says. “We see the elements on lack of flexibility in several systems that hamper that integration.”

Rey Garcia says these issues limit the benefits that renewable energy can provide to consumers.

The European Commission official says that while there has also been progress on investment, further work is needed to ensure public support is used efficiently and encourages private investment.

“Public support on its own will not be sufficient to drive the transition as much as it would be needed,” she says.

2030 target

Rey Garcia says that progress towards the EU’s 2030 renewable energy target is continuing, but there is still significant work to be done to reach the 42.5 per cent objective.

She says this demonstrates that there are still barriers preventing the transition from progressing at the required pace.

Rey Garcia argues that one of the key challenges is replicating the progress achieved in electricity across other sectors.

“We should see how to replicate what we see in the power sector into other sectors,” she says.

She identifies transport and heating and cooling as particular areas requiring greater progress, adding that this challenge applies to Ireland as well as the EU as a whole.

Rey Garcia says legislation is already in place to address some of the barriers, including measures around permitting, renewable energy communities, and support schemes.

However, she says that more needs to be done, particularly around boosting demand in key sectors and ensuring that energy remains affordable.

Clean Industrial Deal

Rey Garcia says the European Commission’s approach to the energy transition has developed alongside the changing priorities of its current mandate.

She explains that the previous Commission mandate involved a significant push towards decarbonisation through the European Green Deal and the Fit for 55 package.

Under the current mandate, which began in late-2024, Rey Garcia says there is a greater focus on bringing competitiveness and decarbonisation together.

“In 2024, the Commission put forward, the Clean Industrial Deal, which really tries to bring all these elements much more closely together,” she says.

Rey Garcia says affordability and security of supply are also central to this approach, particularly in the current geopolitical context.

She identifies electrification as one of the fundamental challenges facing the EU.

Rey Garcia says that limited electrification in some sectors is acting as a barrier to integrating renewable energy more quickly, while the overall level of electrification has “somehow stagnated over the last couple of years”.

She says addressing this will require significant focus during 2026 and the years ahead.

Affordability

Rey Garcia says affordability is closely linked to the success of the clean energy transition.

The Commission has introduced an action plan for affordable energy which contains measures from “quite a number of different angles”.

One area of focus is the composition of electricity bills. Rey Garcia says some costs included on electricity bills are not directly related to energy, highlighting taxes, levies, and charges.

“This has to do with taxes, with levies, and charges that go into the energy bill and maybe should not be there,” she says.

Rey Garcia argues that these costs may need to be reallocated to other priorities. She says consumers should not see a high energy bill and assume that all of the cost is directly related to the transition.

The Commission is also examining the role of long-term contracts in providing greater certainty for the sector.

Rey Garcia points to contracts for difference and power purchase agreements as mechanisms which can provide stability, protect against price volatility, and attract investment. She says Ireland already has “quite some good experience” in this area.

Flexibility and storage

Rey Garcia says the integration of renewable energy requires more than simply increasing renewable generation.

She highlights the importance of renewable hydrogen and low-carbon energy for hard-to-abate sectors, alongside greater electrification and flexibility.

“Flexibility, non-fossil flexibility,” she says, is particularly important, alongside storage and demand response.

Rey Garcia argues that periods of negative electricity prices can provide an investment signal rather than simply representing a problem.

“With flexibility, benefit from those times where energy is cheaper, because indeed the wind is blowing or there is a lot of sun,” she says.

She says these elements need to be brought together to attract investment and gradually reduce the need for public support for renewable energy.

Grids

Rey Garcia highlights the European Commission’s grids package, adopted in December 2025, as an important initiative addressing these challenges.

The package examines infrastructure, flexibility, and the investment required in electricity grids, while also considering the barriers which can be addressed at European level.

Rey Garcia identifies planning as “a fundamental issue” in the delivery of energy projects.

She also highlights interconnection and cross-border infrastructure, alongside measures to better protect critical cross-border energy infrastructure.

The package also examines storage, renewable energy, and the deployment of recharging points.

Rey Garcia says grids and storage are currently acting as bottlenecks in a number of member states.

She says better planning and investment, including through the Connecting Europe Facility, will be required to address these issues and move the energy transition forward.

Electrification and heating

Looking ahead, Rey Garcia says the European Commission will place a particular focus on electrification and heating and cooling.

An action plan on electrification is expected to examine the barriers preventing greater electrification across transport, buildings, and industry.

Rey Garcia says the Commission is looking at how to increase demand for electricity while ensuring that supply and demand remain balanced.

She says this will require greater use of flexibility and storage to ensure electrification does not negatively affect energy prices.

Heating and cooling will also be addressed through a closely related strategy.

Rey Garcia says there is significant potential to increase the use of clean heat, including heat pumps and electric boilers, while district heating and cooling could also have a role where appropriate.

However, she says there are barriers which must be addressed, including the price relationship between electricity and fossil fuels.

“This is really something that influences a lot the attractiveness of some of these solutions,” she says.

Rey Garcia explains that while clean technologies can have lower operational costs, their upfront costs can represent a significant barrier.

The Commission will also examine specific technologies, including geothermal energy, while considering the wider range of solutions available.

“At this moment of the transition, we really need to tap on all the possible solutions,” Rey Garcia says.

She adds that the focus will be on identifying and tackling the horizontal barriers preventing those solutions from being deployed.

Looking beyond the immediate measures, Rey Garcia says the Commission will also begin considering the framework required for climate and energy policy beyond 2030.

However, she emphasises that there is still significant work to be done within the existing 2030 framework, particularly in increasing electrification, improving flexibility, and ensuring that the benefits of renewable energy can reach consumers.