Four years after Russia’s invasion of Ukraine triggered a global energy crisis, Europe is at a critical juncture. While progress has been made in diversifying energy sources and reducing reliance on Russian gas, vulnerabilities remain. The central question is whether Europe has built a resilient energy future.
From Gas Dependence to Diversification
In 2022, Russia supplied 45% of Europe’s gas imports. Today, that figure has fallen to 13%, a shift driven by the need for alternative suppliers. This transition involved opening eleven new LNG (liquefied natural gas) import terminals, increasing import capacity by a third. However, this hasn’t shielded citizens from price volatility; Italy, for example, imported 36% of its LNG from Qatar as of the first half of 2025.
Simply swapping one dependency for another is not a long-term solution, according to Szymon Kardaś, an energy expert at the European Council on Foreign Relations. Europe remains vulnerable to external shocks, and while Donald Trump’s potential unreliability is a concern, the risk of a gas cutoff from the US is considered lower than from Russia.
The Iberian Peninsula’s Success
The Iberian Peninsula (Spain and Portugal) has seen a notable success in weakening the link between gas and electricity prices. This decoupling has provided a buffer against price spikes, demonstrating the effectiveness of strategic energy policies. Natalia Fabra, an energy economist at the Center for Monetary and Financial Studies, suggests the Iberian model could serve as a blueprint for other European nations.
Renewable Energy and the REPowerEU Plan
Investment in renewable energy sources has accelerated, with the European Investment Bank (EIB) allocating €33 billion in loans for renewables and grid strengthening in 2025 as part of the REPowerEU plan. Renewables now account for 30% of electricity consumption in the EU, up from 20% in 2020. Combined, renewables and nuclear power generate over two-thirds of the EU’s electricity, reducing reliance on imported fuels.
Challenges in Electricity Pricing
Despite progress in renewables, the structure of the European electricity market remains a challenge. Prices are often set by the most expensive source of electricity – typically gas-fired power plants – even when cheaper renewable energy is available. This means fluctuations in gas prices continue to impact electricity bills, particularly in Italy and Germany, where gas still plays a significant role in power generation.
In March, electricity cost €136 per megawatt-hour in Italy and €100 in Germany, while remaining stable at €55 and €61 in Spain and France. This difference highlights the benefits of a diversified energy mix and a decoupled pricing system.
Looking Ahead
Ursula von der Leyen, President of the European Commission, has outlined conditions for a lasting peace agreement in Ukraine, including security guarantees without limitations on Ukraine’s military, respect for its sovereignty, and financial stability. Utilizing Russian assets to support Ukraine’s reconstruction is seen as a crucial aspect of this financial stability, particularly in 2026 and 2027.
Frequently Asked Questions
Is Europe still dependent on Russian energy?
While significantly reduced, some dependence remains, particularly in countries like Hungary and Slovakia.
What is REPowerEU?
REPowerEU is a plan launched in 2022 to accelerate the transition to renewable energy and reduce reliance on Russian fossil fuels.
How is the EU addressing electricity price volatility?
The EU is addressing electricity price volatility by investing in renewables, improving grid infrastructure, and exploring market reforms to decouple gas and electricity prices.
As Europe navigates this complex energy landscape, what role will individual consumer choices play in securing a more sustainable and stable energy future?
