ENERGY SITUATION IN EU MEMBER STATES

Source: IEA

AUSTRIA

Austria’s government is committed to achieving carbon neutrality n later than 2040. This will require Austria to substantially enhance de-carbonisation efforts across all energy sectors. Austria has set a target of a 100% renewable electricity supply by 2030 (national balance). In 2018, already 77% of electricity came from renewables, the third largest share among IEA countries. Achieving the 2030 target requires investments to make networks more resilient and flexible, optimizing demand side management through digitalization, and updating the legal and regulatory framework to allow more consumer involvement. As in many countries, decarbonizing heat and transport is challenging and Austria’s emissions growth since 2014 is largely driven by the increase in final energy consumption in buildings and transport. The government plans to phase-out oil-and coal-fired heating systems by 2035, and to restrict the use of natural gas for heating in new buildings by 2025.  Austria has impressive capacities for innovation and is an international best practice case in terms of leveraging public and private funding.

BELGIUM

Belgium has made clear progress in increasing competition in electricity  and natural gas markets. It has reduced the use of fossil fuels and increased the share of renewable energy. The country’s economy is also becoming less energy intensive. Belgium’s National Energy and Climate Plans sets a 2030 target to reduce greenhouse has emissions from the energy sector by 35% from 2005 levels, to reach 17.5% renewables in gross final energy consumption, and significantly reduce energy demand. Belgium has made progress on the these goals. Coal-fired generation was phased out in 2016 and Belgium is a global leader in offshore wind, with 2.23 GW in 2020 and plans for 4.5 GW by 2030. Belgium remains reliant on fossil fuels and is facing security challenges. Nuclear energy covers over half of electricity demand, while the government plans to phase out nuclear between 2022 and 2025. Almost half of Belgium’s gas imports come from the Netherlands with most delivered through a dedicated network connected to the Groningen gas field, which will stop production in 2022. Belgium is working to address energy security issues and has one of the most interconnected electricity grids in Europe.

BULGARIA

Bulgaria adopted The Energy from Renewable Sources Act in 2011. The Act regulates the generation and consumption of energy from renewable sources with the aim of achieving the national targets in terms of renewable energy use in final gross energy consumption.

CROATIA

Croatia National Energy Strategy 2009-2020 has three basic objectives: increase security of energy supply, develop competitive energy system and ensure sustainable energy sector development. These objectives are particularly important for the country, as it is heavily dependent on energy imports, resulting in its vulnerability to energy prices fluctuations.

CYPRUS

Cyprus adopted the Law on the Promotion of Renewable Energy and Energy Efficiency in the early 2010s, which creates a fund that finances the premium tariff and other costs related to renewable electricity generation.

CZECH REPUBLIC

Energy policy in the Czech Republic is guided by the State Energy Policy (SEP), the latest one dating to 2015. Key targets are to reduce energy consumption, improve the energy intensity of the economy and to expand nuclear power by about 2 500 MW by around 2035. Fossil fuels are still essential blocks of the energy mix in the Czech Republic. Coal is available domestically in vast resources and is used intensely for heating and power production, and contributes, along with nuclear power, to the country’s moderate degree of energy self-sufficiency. Air pollution is  a particular problem due to the extensive use of coal and to the relatively old car fleet, which is dominated by diesel cars. The Czech Republic had some success in decoupling its emissions from economic growth. Still, CO2 emissions per capita and carbon intensity of the economy rank among the highest in IEA member countries. The IEA is currently drafting a new In-depth energy policy review of the Czech Republic, with the last one dating to 2016. The report will be launched in the second half of 2021. A key theme of the ongoing analysis is how the country should prepare for phasing out coal from the power and heating sectors, which is currently being contemplated by the government.

DENMARK

Denmark’s net-zero commitment and advancements with renewables make it a leader in energy transition. The country aims to cut GHG emissions by 70% from 1990 levels by 2030 and for renewables to cover at least half of the country’s total energy consumption by 2030. Denmark has committed to achieving net-zero emissions by 2050 in line with the Paris Agreement. Moreover, the government has agreed to phase-out all coal-fired power by 2030. The country also has a political agreement in place that targets for renewable energy to cover 100% of electricity and 55% of overall consumption by 2030. The government also aims to end the sale of petrol and diesel cars by 2030. Already, Denmark is a world leader on wind energy. It has the highest share of wind in both primary energy consumption and electricity of any IEA country. Supported by a flexible domestic power system and a high level of interconnection, Denmark is now widely recognized as a global leader in integrating variable renewable energy while at the same time maintaining a highly reliable and secure electric-power grid. Denmark’s large scale use of combined heat and power plants with heat storage capacity, and the increasing deployment of wind power, offer great potential for efficient integration of heat and electricity systems.

ESTONIA

Estonia is on the brink of a major energy transition that will involve substantially reducing the role of domestically produced oil shale in the country’s future energy mix. The transition will require Estonia to carefully balance social, environmental, economic and energy security considerations. Estonia has a unique energy mix among IEA member countries. The energy supply is dominated by domestically produced oil shale, an energy-rich sedimentary rock that can be either burned for heat and power generation or used for producing liquid fuels. This gives the country of high degree of independence but also the highest carbon intensity among all IEA countries. In 2018, oil shale accounted for 72% of Estonia’s total domestic energy production, 73% of total primary energy supply and 76% of electricity generation, which is a significant drop over the past 10 years. The new Estonian government in early 2021 announced plans to reach carbon neutrality by 2050 and to stop producing oil shale in 2035. Estonia has achieved its mandatory emissions reduction and renewable energy targets for 2020. Looking ahead to 2030, Estonia for the first time will be required to reduce emissions rather than merely contain their growth. As with most IEA countries, Estonia’s main challenge is decarbonizing its transport sector, which currently is not on track to meet its short-term emission and energy efficiency targets.

FINLAND

Finland is fast-tracking the decarbonization of its economy with a 2035 net zero target. The country has made good progress, mostly in power generation thanks to large shares of nuclear, hydro and bioenergy. Fossil fuel use has decreased greatly in the past years. The cold climate, long distances and energy-intensive industries condition the country’s carbon-neutrality energy transition. Transport and industry are the key sectors for Finland to make further progress on meeting its ambitious national climate targets.  The 2035 climate neutrality target will require strong transformations and technological advancements in energy markets. Finland ranks among the leading IEA countries in public and private spending on energy research, development and demonstration. And it is a global leader in second-generation biofuels produced from wood, notably biodiesel. As an Arctic country, Finland faces rapid climate changes, with potential consequences for, among others, forest growth and the occurrence and strength of winter storms. A range of measures have been put in place to strengthen the resilience of the electricity distribution networks. The 2018 IEA in-depth review provides recommendations to help the country guide the transition of Finland’s energy sector.

FRANCE

France has a very low-carbon electricity mix owing to its large nuclear fleet, the second-largest after the United States. As an early leader in setting out an ambitious energy transition, France legislate a net zero emissions target for 2050 in its 2019 Energy and Climate Act. A national low-carbon strategy with 5-year carbon budgets and a multiannual plan for energy investments complement the long-term target. France plans to reduce the share of nuclear from 70% to 50% in its electricity mix by 2035 and close its last coal plants by 2022. Many nuclear reactors are reaching the end of their lifetime, which requires modernizing those that can continue long-term operations under safe conditions. Maintaining security of the electricity system and a low-carbon footprint while reducing the share of nuclear energy will require investments in efficiency, renewable energy and enhanced and flexible power system operation. In 2021, the IEA and network operator RTE published a study on operating a power system with very high shares of variable renewables. France imports all of its oil and gas needs and its oil and gas industry and infrastructure is adapting to low carbon fuels and electrification.

GERMANY

In late 2010, Germany initiated the Energiewende, a major plan for making its energy system more efficient, supplied mainly by renewable energy sources. The country has adopted a strategy for an energy pathway to 2050, which includes an accelerated phase-out of nuclear power by 2022. In order to achieve the ambitious Energiewende by 2030 the goals are clear: half of all electricity supply will come from renewable energy sources and coal use will be phased out by 2038. Germany has been an early leader in offshore wind and solar PV and increased its targets with 20 GW of offshore wind by 2030 and 40 GW by 2040, alongside investments in 5 GW of hydrogen by 2030. In its 2020 policy review, the IEA underlines that Germany needs to boost cost-effective market-based approaches to support the forecasted growth of variable renewable generation. The costs and benefits of the energy transition need to be allocated in a fair and transparent way among all sectors and end-users. In particular, emissions reductions from heat and transport require additional policy impetus. To foster a secure and affordable transition, transmission and distribution networks must expand in parallel with renewable energy capacity. As nuclear and coal-fired generation are being phased out, the monitoring of Germany’s ability to meet electricity demand at peak times should continue in the medium term. The 2020 IEA in-depth review provides recommendations to help the country guide the transition of Germany’s energy sector.

GREECE

Greece is implementing comprehensive energy sector reforms to drive decarbonization and foster competitive markets. The government is focused on a just and affordable energy transition that benefits all citizens. Greece has set targets to reduce greenhouse gas emissions by more than 56% by 2030 compared to 2005 and to have a climate neutral economy by 2050. Most coal fired generation will be phased out by 2023 and EUR 5 billion has been committed to assist impacted communities. Auctions are driving strong deployment of solar PV and onshore wind. The government is implementing reforms to standardize and simplify licensing procedures for renewable projects and is investigating options for offshore wind. There are also projects for interconnections and renewables to decarbonize electricity on Greek islands. Greece has reformed its wholesale electricity market to support better coupling with the rest of Europe, which will result in lower prices.

HUNGARY

In June 2020, Hungary adopted a new law making the net-zero emission target by 2050 a binding obligation. This is part of a wider change in the country’s energy and climate policies. Hungary’s National Energy Strategy to 2030 was also updated to include an outlook until 2040 focusing on clean, smart and affordable energy while strengthening energy independence and security, and decarbonising energy production. Renewable and nuclear electricity, and electrification of end-use sectors, are identified as the key drivers towards the 2050 target. Hungary expects substantial investments in the power sector, notably for the construction of two new nuclear power generating units. Renewable energy production has increased significantly but growth in the sector has slowed. The introduction of a new support system for electricity from renewable sources could get progress back on track. However, measures that limit wind power developments are likely to have a negative impact on the sector. Hungary’s greenhouse gas emissions have declined as the economy has become less carbon-intensive. Nonetheless, the country could adopt more ambitious targets for emission reductions to 2030 because the target of cutting emissions 40 % from 1990 levels laid out in the new climate law will require much larger emission cuts in the following decades to reach net-zero in 2050

IRELAND  

Ireland boasted the second highest share of wind in electricity generation among IEA member countries in 2018. It has also improved its energy security through an increase in domestic gas production and a reduction in oil’s share in energy supply. Ireland has recovered remarkably from the economic crisis which started in 2008 and has the fastest growing economy among all IEA countries since 2014, when GDP exceeded pre-crisis levels. Energy use has increased  with GDP growth but still remains under the 2006 peak, partly reflecting the structural shift in the economy toward dominance by the services sector. However, the government’s strategy to establish Ireland as a preferred location from the global digital and data hosting industry, will potentially result in strongly growing electricity demand. This makes fast decarbonization of the electricity system a necessity. Despite the progress made, Ireland is not on course to meet its mandatory emissions reduction and renewable energy targets for 2020. Furthermore, there are questions about Ireland’s ability to meet the 2030 emission reduction targets, through the impact of the most recent policies announced by the Government is not yet reflected in the latest emission pathway.

ITALY

Italy’s government has put energy and climate at the centre of its political agenda. The national energy and climate plan set very ambitious targets for renewables by 2030; aiming to reach 30% in total energy consumption and 55% in electricity generation. Italy’s energy policy is strongly pro-renewables. The country has experienced impressive growth in the renewable energy sector and has been successful in integrating large volumes of variable renewable generation. Containing costs is a priority, and policies need to focus on bringing deployment costs towards international benchmarks. Italy has also continued to progress in terms of market liberalization and infrastructure development, notably in the electricity market where transmission improvements between north and south, as well as market decoupling, have resulted in price convergence throughout the country.  Development in the gas sector has been slower, and greater progress is needed if Italy is to become a southern European gas hub. Furthermore, institutional arrangements within the energy sector remain complex and should be reformed and strengthened. The Government is revising incentives and subsidies which are not considered to be efficient or aligned with decarbonization targets. There is a general discussion related to taxation in the energy sector, while most economically fragile categories will need to remain protected.

LATVIA

Latvia’s 2020 National Renewable Actions Plan targets a 40% share of energy generated from renewable sources in gross final energy consumption, 53% of heat consumption met by renewable sources and 60% of electricity demand met by electricity generated from renewables.
 

LITHUANIA

Lithuania’s Law on Energy from Renewable Sources sets energy targets to be achieved by 2020 such as 20% of gross annual energy consumption and 60% pf district heating generated by renewables and a target of 20% renewable energy in the transport sector. In 2019, Lithuania applied for membership to the IEA.

LUXEMBOURG

Luxembourg’s energy demand and greenhouse gas emissions have shown signs of decoupling from its robust economic and population growth, and the country is seeing strong deployment of renewable energy. The government has adopted an ambitious target to reduce greenhouse has emission by 50-55% by 2030 compared with 2005 and has proposed legislation aiming for a carbon neutral economy by 2050. Luxembourg’s low energy prices are a barrier to investments in energy efficiency and renewables. The country has a fossil fuel intensive energy mix driven by a high demand for transportation fuels, notably from transiting freight trucks and commuters. The government has adopted numerous measures to push for decarbonization. A  carbon tax was introduced in 2020. Renewable generation is encouraged through subsidies and auctions. Several programs support energy efficiency in buildings and industry and there is a target for 49% of all passenger cars to be electric by 2030.

MALTA

The National energy policy of Malta was launched in December 2012. It lists decisions and actions that have already been implemented as well as measures aiming to ensure the sustainability of Malta’s energy sector.

NETHERLANDS

The Netherlands plays an important role as a hub for the global energy trade. The primary focus of Dutch energy policy is transitioning to a low carbon energy system. The 2019 Climate Act sets legally binding targets to reduce greenhouse gas emissions (GHG) emissions by 49% by 2030 and by 95% by 2050 (compared to 1990 levels) and for 100% of electricity to come from renewables by 2050. Despite successful decoupling of economic growth from GHG emissions, the Netherlands remains reliant on fossil fuels. Numerous measures have been introduced to support decarbonization. The Stimulation of Sustainable Energy Production scheme uses competitive auctions to award subsidies to renewables, hydrogen and carbon capture based on avoided CO2 emissions. An offshore wind roadmap is driving rapid deployment and aims for 11.5 GW of capacity by 2030, while strong innovation programs support deployment of key decarbonization technologies.

POLAND

Coal dominates the power sector of Poland, where it is the largest source of greenhouse gas emissions and a major employer. While the country has strongly expanded renewable energy over the past decade, its future role in the energy supply mix needs to be clarified. According to the draft Energy Policy of Poland to 2040, the share of coal and lignite in electricity generation will be reduced from just under 80% in 2017 to 60% by 2030. The draft policy also places priority on long-term energy security, reducing greenhouse gas emissions and air pollution, increasing energy efficiency and decarbonizing the transport system. Nuclear power could play a significant role in the country’s energy supply and the country is making plans to deploy its first nuclear power generation plant. The implementation of the new Energy Policy will require significant investments to reduce the share of carbon-intensive power plants and increase the share of low-carbon energy. While the Polish energy infrastructure has been modernized, further investments are needed to strengthen integration with neighboring markets.  The latest IEA review of the energy policies of Poland from 2016 examines the existing infrastructure and makes recommendations for further improvements that are intended to guide the country towards a more secure and sustainable energy future.

PORTUGAL  

Portugal’s energy policy places a strong focus on achieving economy-wide decarbonization through broad electrification, combined with rapid expansion of renewable electricity generation while maintaining affordable electricity prices. Portugal’s National Energy and Climate Plan sets 2030 targets for emissions reductions, energy efficiency and renewable energy that aim to put the country on a path to achieving cost effective carbon neutrality by 2050. Portugal is supporting decarbonization through a wide variety of measures. A carbon tax introduced in 2016 supports emissions reductions. Coal-fired generation will be phased out in 2021. Portugal is further developing its large hydropower fleet, including additional capacity of pumped hydro storage. Portugal is an international leader for integration of wind generation, and auctions introduced in 2019 are driving rapid deployment of PV and battery storage. Portugal is pushing for better electricity interconnections with the rest of Europe and has set ambitious goals for clean hydrogen.

ROMANIA

By 2020, the objective of Romania is to guarantee the efficient operation of ots energy system under security conditions. Romania also plans to meet the obligation set by EU in terms of greenhouse gas emissions through its legislative package “Climate changes-renewable energies”

SLOVENIA

Slovenia has put in place a National Renewable Action Plan to 2020, which targets a 25% share of energy generation from renewable sources in gross final energy consumption and 39% if electricity demand met by electricity generated from renewable energy sources.

SLOVAKIA

Slovak Republic’s energy policies have made significant progress in recent years. Along with its neighbors and with support from the European Union, the country has strengthened cross-border connections for electricity, natural gas and oil, improving its energy security and increasing market competition. The key objectives of the Slovak energy policy agenda are increasing efficiency in the power and end-use sectors, reducing energy intensity, reducing dependence on energy imports, expanding the use of nuclear power, increasing the share of renewables in the heat and electricity sectors, and supporting the use of alternative fuels for transport. With these sound objectives in place, the government should now focus on the cost-effective implementation of the adopted policies through concrete actions. Energy policy in the Slovak Republic is driven to a large extent by EU directives and requirements, particularly with respect to liberalizing gas and electricity markets. Energy policy is also driven by high dependence on energy imports from Russia, making energy security a strong focus area. The government should focus on incorporating ambitious targets for 2030 on energy security, CO2 emissions and energy markets; continuing to decarbonize the heating sector; developing a clear and transparent program for eliminating administrative control over electricity and natural gas end-user pricing; and taking further measures to limit energy-related CO2 emissions, in particular in the transport sector.

SPAIN

Spain in recent years has overcome a situation where electricity tariffs did not cover system costs and has closed all its coal mines, allowing it to prioritize climate change issues and align its goals with EU objectives and ambitions. The current Spanish framework for energy and climate is based on the 2050 objectives of national climate-neutrality, 100% renewable energy in the electricity mix and 97% renewable energy in the total energy mix. As such, it is centered on the massive development of renewable energy, particularly solar and wind, energy efficiency, electrification and renewable hydrogen. Spain is progressing toward its 2030 targets, notably in the electricity sector. The future trajectory of its power mix warrants careful consideration to ensure a smooth transition, especially as Spain plans to phase-out both coal and nuclear power generation. Plans include expansion of storage, demand side management, digitalization and international interconnections. Nonetheless, Spain’s total energy mix is still heavily dominated by fossil fuels. Notably, the transport industry and buildings sectors all have considerably more work ahead to meet the country’s targets for renewables penetration and decarbonization. Spain has emphasized the concept of a just transition to ensure that communities in traditional energy sectors, especially coal mining, are not left behind.

SWEDEN

Sweden is a global leader in decarbonization and has targets to cut greenhouse gas emissions 59% by 2030 compared with 2005, and to have a net-zero carbon economy by 2045. Sweden was the first country to introduce carbon pricing and has the highest carbon price in the world, which has proven effective at driving decarbonization. Most of Sweden’s electricity supply comes from hydro and nuclear, along with a growing contribution from wind. Heating is supplied mainly through bioenergy-based district heating and heat pumps. Most of Sweden’s greenhouse gas emissions come from the transport sector, which remains reliant on oil. The government has a target to reduce transport emissions by 70% from 2010 to 2030 and is supporting transport decarbonization through electrification and advanced biofuels. Sweden is also supporting industrial decarbonization and is home of the first major projects for hydrogen-based steel production.