Europe’s Energy Crossroads: Lessons Learned and the Road Ahead
Four years after the energy crisis sparked by the war in Ukraine, a familiar refrain echoes through Brussels: the need to decouple gas prices from electricity costs. Despite repeated pledges from European Commission President Ursula von der Leyen, progress remains frustratingly slow. This raises a critical question: has Europe truly learned from the vulnerabilities exposed by the 2022 crisis?
The Persistent Gas-Electricity Link
Economist Natalia Fabra of the Center for Monetary and Financial Studies points to a core issue: a lack of concrete action despite numerous well-intentioned EU documents. While the Iberian Peninsula has successfully weakened its link between gas and electricity prices, it remains an exception. Szymon Kardaś, an energy expert at the European Council on Foreign Relations, emphasizes Europe’s continued reliance on hydrocarbon imports, leaving it susceptible to international crises.
Renewable Energy Gains and Investment
Despite criticisms, some progress is being made. Nadia Calviño, President of the European Investment Bank (EIB), highlights the EIB’s €33 billion investment in renewable energy and grid strengthening in 2025, part of the REPowerEU plan. Experts like Ben McWilliams of Bruegel acknowledge these advancements, stating that transforming an energy system takes time.
Shifting Dependencies: From Russia to the US
Europe has significantly reduced its reliance on Russian gas, from 45% of imports in 2022 to 13% today, with full independence by October 2027 appearing achievable, despite resistance from Hungary and Slovakia. But, this shift hasn’t eliminated dependency; it’s merely altered it. The United States now accounts for over a quarter of European gas imports. While Kardaś suggests this recent reliance is less precarious than the previous one on Russia – due to the relative reliability of US supply – it still represents a vulnerability.
Currently, 31% of Europe’s gas supply comes from Norway, 27% from the US, 12% from Algeria, 4% from Azerbaijan, and 3% from the UK.
Demand Reduction: A Rare Bright Spot
A notable achievement has been the reduction of gas consumption. In 2025, the EU consumed 3,480 terawatt-hours (TWh) of gas, a 18% decrease compared to 2021. This decline is partially attributed to the slow recovery of energy-intensive industries like fertilizers, chemicals, and steel, but also reflects genuine energy savings.
Gas Storage and Market Adjustments
Lessons learned from the 2022 price spikes have prompted the EU to encourage member states to review their gas storage targets, aiming to avoid synchronized purchasing that drives up prices. The current regulation requires filling storage to 85-90% before winter.
Electricity: A Mixed Picture
Renewable energy sources – solar and wind – now generate 30% of the EU’s electricity, up from 20% in 2020. Combined with other renewables, they account for 48% of total electricity production, surpassing hydrocarbons at 29%. Nuclear power remains stable at around 23%, primarily concentrated in France. Over two-thirds of the EU’s electricity production is now independent of direct imports.
However, the impact of gas prices on electricity costs varies significantly across Europe. Italy and Germany are currently experiencing higher electricity prices due to their continued reliance on gas, while Spain and France benefit from lower costs thanks to their greater reliance on renewables and nuclear power, respectively.
The Spanish Model: A Case for Decoupling
Spain has nearly doubled its solar and wind capacity between 2019 and 2025, now representing almost half of its electricity generation. This has dramatically reduced the influence of gas prices on electricity costs. In 2019, gas determined electricity prices 75% of the time; today, that figure is just 15%. Italy, in contrast, remains 89% dependent on gas, while Germany is at 40%.
The Path Forward: Electrification and Clean Energy
Experts agree that accelerating the energy transition is crucial. Chris Rosslowe, Chief Analyst at Ember, emphasizes the need to electrify the economy and develop clean electricity sources, citing Denmark’s 3.3 million barrel reduction in oil consumption as an example.
Frequently Asked Questions
Q: Is Europe still reliant on Russian energy?
A: Significantly less so. Russian gas imports have fallen from 45% in 2022 to 13% currently.
Q: What is REPowerEU?
A: A European Commission plan to rapidly reduce dependence on Russian fossil fuels and accelerate the green transition.
Q: Which countries are most vulnerable to energy price fluctuations?
A: Italy and Germany, due to their continued reliance on gas for electricity generation.
Q: What is the role of the EIB in the energy transition?
A: The EIB is investing heavily in renewable energy projects and grid infrastructure to support the transition.
Q: What can be done to further reduce Europe’s energy dependence?
A: Accelerating the deployment of renewable energy, improving energy efficiency, and diversifying energy sources are key steps.
Did you recognize? Spain has successfully decoupled its electricity prices from gas prices by significantly increasing its renewable energy capacity.
Pro Tip: Investing in energy efficiency measures, such as insulation and energy-efficient appliances, can significantly reduce your energy consumption and lower your bills.
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